Evercore ISI said Rivian‘s AI & Autonomy Day event last week was “headed in the right direction” but offered little that was materially different from competitors or Wall Street expectations.
The firm struck a more cautious tone than other analysts who reacted bullishly to the EV maker’s event.
Analyst Chris McNally reiterated an Outperform rating and $18 price target on the stock in a research note sent to clients Monday.
McNally described Rivian‘s announcements as “attractive for consumers, not market moving for investors (yet).”
Custom Chip the ‘Lone Surprise’
McNally said the biggest surprise from Thursday’s event was Rivian‘s decision to develop its own custom silicon rather than relying on Nvidia chips.
Rivian unveiled the RAP1, a custom 5nm processor that integrates processing and memory onto a single multi-chip module, powering the company’s third-generation Autonomy Compute Module.
“The big (lone?) surprise of the day was that RIVN is following in the footsteps of other vertical integrators and is ditching NVDA in favor of a custom built, in-house chip (produced by TSMC) designed to save time (up to 1-year faster development), and long run cost (despite increased upfront R&D spend) and increases efficiency (reduction of wasted compute),” McNally wrote.
The system delivers 1,600 sparse INT8 TOPS and can process up to 5 billion pixels per second.
McNally noted the specifications exceed what competitors are targeting for Level 3 autonomy.
“The chip will be capable of up to 800 TOPS (full system ~1600; L3 competitors aiming ~300-500 TOPS) processing up to 5Bn megapixels/second (seemingly more than necessary given 11 cameras at 65 megapixels each + 5 radar and 1 LiDAR),” he wrote.
Similar to Chinese Approach
McNally said Rivian‘s autonomy strategy closely resembles approaches used by Chinese automakers, though with higher costs and longer timelines.
“RIVN’s approach looks very similar to Chinese approaches for L2++/L3 with LiDAR and an AI based driving ‘brain’, utilizing an End-to-End approach (vs ‘rules based’ approaches of yesteryear)…but with Western costs/timelines,” he wrote.
Rivian said its Gen 3 autonomy hardware, including the new compute module and LiDAR integration, is currently undergoing validation and expected to ship on R2 models starting at the end of 2026.
Wall Street Divided
Evercore’s measured response contrasts with more enthusiastic reactions from other firms.
Needham raised its price target on Rivian by 64% to $23 while maintaining a Buy rating.
Analyst Chris Pierce cited increased confidence in Rivian‘s positioning as software and AI-defined vehicles become industry requirements, with the company’s vertical integration underpinning “a durable competitive advantage.”
BNP Paribas senior analyst James Picariello said the event exceeded expectations and positioned Rivian as a serious challenger to Tesla’s dominance, adding Rivian is “even leapfrogging Tesla right now in certain AI-integration areas.”
Cantor Fitzgerald analyst Andres Sheppard said the firm was “very encouraged” after attending the event and participating in a demo ride on public roads that “required no human intervention.”
Sheppard maintained a Neutral rating and $15 price target but outlined a bullish case for Rivian‘s autonomy strategy.
Stock Hits 23-Month High
Rivian shares hit $19.60 on Friday, the highest level since January 2024, before paring gains to close up 12% at $18.42.
The stock has risen 38.5% year to date, driven by a 24% surge over the past month.
Trading volume spiked following the event, with more than 103 million shares changing hands Friday, more than doubling the 65-day average volume of 49.1 million shares.
As of press time, the stock is trading 1.5% higher on Monday’s pre-market trading session at $18.70.
