Needham has sharply raised its price target on Rivian by 64% following the EV maker’s announcements at the ‘Autonomy and AI Day’ on Thursday.
Analyst Chris Pierce maintained his Buy rating on the stock in a research note published Friday, citing increased confidence in Rivian‘s positioning as software-defined and AI-defined vehicles become industry requirements.
“We reiterate our Buy rating and raise our price target to $23 following RIVN’s AI & Autonomy Day,” Needham’s analyst wrote.
“The event increased our confidence in RIVN’s positioning as software (and now AI) defined vehicles increasingly become industry table stakes, with RIVN’s vertical integration allowing for fuller control driving faster learning and feature iterations across driver interface and autonomy technology, underpinning a durable competitive advantage,” Pierce wrote.
Needham’s R2 Enthusiasm
Pierce said Rivian‘s upcoming R2 SUV remains the primary driver of his bullish thesis, but the Autonomy Day presentation strengthened his conviction in the company’s longer-term technology roadmap.
“Our R2 enthusiasm against low expectations still does the heavy lifting for our bullish thesis, but the event strengthened our conviction in RIVN’s longer term autonomy roadmap and points of differentiation vs legacy OEMs,” the analyst wrote.
The upgraded price target reflects a higher valuation multiple, with Pierce now applying 20 times estimated fiscal year 2028 adjusted EBITDA, up from 15 times previously.
“Our updated target is 20x EV/our FY28E adj EBITDA discounted back, up from 15x prior, with percolating R2 enthusiasm supporting multiple expansion ahead of a 1H26 launch,” Pierce explained.
Previous Rating Ahead of R2 Launch
The price target increase marks a significant shift from Needham’s stance four months ago.
In the first week of August, after the EV maker reported its second quarter earnings results, Needham reduced its price targets on Rivian to $14, down from $16.
Three weeks later, in late August, Pierce had maintained his $14 price target while reiterating his Buy rating ahead of the R2 launch.
“We reiterate our Buy rating and $14 target ahead of RIVN’s R2 launch, supported by end-market diligence and a consumer survey conducted in low EV penetration metros,” Pierce wrote at the time.
The R2 is Rivian’s mid-size SUV with an approximate $50,000 average selling price, which Needham has said would substantially expand the company’s total addressable market beyond the more expensive R1 vehicles that start at $77,000.
Rivian confirmed on Thursday that LiDAR will arrive to its upcoming models, starting with the R2 in late 2026.
The company will have a yearly maximum production capacity of more than 150,000 units for the model, completing each one every two minutes when production ramp-up is achieved.
Upside Potential
Based on Thursday’s closing price of $16.43, Needham’s new price target of $23.00 implies an upside potential of 40.0%.
Previously, the firm’s target for the EV stock was $14.00.
Autonomy Day Highlights
At Thursday’s event, Rivian unveiled its first custom 5nm autonomy processor called RAP1, a Gen 3 autonomy computer delivering 1,600 sparse INT8 TOPS, and confirmed LiDAR integration for future R2 models shipping in late 2026.
The company also announced Autonomy+, a driver-assistance subscription launching in February 2026 at $49.99 per month or $2,500 as a one-time lifetime upgrade — significantly undercutting Tesla’s $8,000 upfront cost or $99 monthly subscription for Full Self-Driving.
Despite the announcements, Rivian shares fell 6.1% on Thursday.
As of press time, the stock is trading 1.4% higher minutes before the market opening at $16.67.
As reported earlier on Friday, the first public demo drive of Rivian‘s new autonomy platform showed multiple errors including an attempted red light violation and a failure to stop for a pedestrian.
