Actions of Rivian Automotive(NASDAQ:RIVN) it languished for most of 2025. From January 1 to November 1, the company’s stock price barely moved, although there were sporadic ups and downs along the way. However, over the last month, the stock’s value has skyrocketed by more than 40%.
I’ve been urging investors to take a closer look at Rivian stock all year. In many ways, the company appears to have the potential to become the next tesla. Even after the latest price surge, the stock still appears to be a long-term buy for several reasons, the most important of which is that it is expected to see major progress in 2026.
Take a quick look at Tesla’s valuation and you’ll notice that its stock is priced at enormous premium over almost all other electric vehicle (EV) stocks. It trades at a price-to-sales ratio of around 17. Meanwhile, Rivian trades at just 4.2 times sales.
There are many reasons for Tesla’s premium. The company has a huge capital advantage, as well as the best brand recognition in the industry. But it also has a leading position in robotaxis, a market that some experts believe will eventually be worth more than $5 trillion.
The robotaxi market seems like a high-tech business. But it is much more than that. Investors have been betting on autonomous driving stocks for more than a decade.
Progress has been slow. Cameras and detection devices cost a lot of money and real-world testing has been limited due to regulatory and safety concerns. But artificial intelligence (AI) has greatly accelerated the timeline in recent years.
“There’s a huge leap in AI happening right now, and it’s resulting in smarter, end-to-end AI systems that can learn much more efficiently, are interpretable, and can generalize to all possible scenarios on the road,” said Raquel Urtasun, CEO of Waabi, a company that specializes in autonomous driving technology. “These advances result in autonomous vehicles with superhuman capabilities that will improve road safety and transform transportation as we know it.”
Tesla has wisely invested heavily in AI and investors have been eager to reward it for its efforts. Overall, AI stocks performed very well in 2025, so their inclusion in that category generated direct gains for shareholders.
For most of the year, Rivian was not considered an AI stock. But I repeatedly pointed out that Rivian was also investing heavily in AI, as was Tesla. Rivian scheduled an AI day in early December and shares apparently began to rise according to expectations.
Executives largely delivered, with new updates on hands-free roadside assistance, point-to-point navigation, away-view alerts, and Level 4 personal autonomy. Expect the EV maker’s AI progress to continue going from strength to strength in 2026. But there’s one catalyst that makes me even more excited in the near term.
A Rivian van in front of the company’s headquarters. Source: Rivian
Tesla has many vehicle models on the market. But its two cheapest models, the Model Y and Model 3, account for more than 90% of its vehicle sales. To compete directly with Tesla, EV manufacturers must have several impressive models priced under $50,000.
Until now, few companies have achieved this feat. Most competing EVs are either overpriced or underpriced, with mediocre features and relatively minimal range.
Currently, Rivian only has two models in circulation: the R1S and the R1T. Both are priced above $70,000, significantly above what most consumers are willing to pay. But next quarter it is expected to begin production of the R2, its first model priced under $50,000. Two more models will follow: the R3 and R3X, and both are expected to be priced under $50,000.
In a few months, Rivian could go from a niche luxury carmaker with AI advantages to a legitimate Tesla competitor. More vehicles on the road give you more real-world data, further strengthening your AI.
Even after the recent share price surge, Rivian still has a market capitalization of less than $30 billion. Compare that to Tesla’s $1.5 trillion valuation and the long-term upside potential for Rivian stock becomes clear.
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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Tesla. The Motley Fool has a disclosure policy.
Here’s why Rivian stock can be bought before January 1, 2026 originally posted by The Motley Fool
