Rivian Automotive (RIVN) is in the spotlight on Friday after announcing the acquisition of Third Dimension AI, strengthening its push into autonomous driving. The startup’s technology converts real-world data into virtual environments for training and testing driving software. While financial terms of the transaction remain undisclosed, the buyout supports RIVN’s consumer vehicle and robotaxi ambitions.
The announcement arrives as Rivian shares are out of favor with investors, currently down about 40% versus their year-to-date high.
Significance of the Acquisition for Rivian Stock
Third Dimension’s platform will allow Rivian to recreate challenging driving situations and repeatedly change their conditions, helping its software learn without waiting for unusual events to occur on public roads.
The startup’s leadership and technical staff will join RIVN’s autonomy research and engineering teams, the joint press release revealed on Oct. 23.
In the long run, this acquisition could prove bullish for Rivian stock as it accelerates development and enables more extensive testing of autonomous driving features that may distinguish the firm’s electric vehicles (EVs).
For the near term, however, RIVN remains firmly below its key moving averages (MAs), signaling bears are in control across multiple timeframes.
Are RIVN Shares Worth Owning for the Long Term?
RIVN stock offers growth potential, but calling it a great long-term holding requires confidence in its path to profitability.
Rivian’s third-quarter deliveries reached 19,248 vehicles, and the EV company reiterated its annual target of at least 65,000 vehicles, demonstrating progress as the R2 expands its lineup. But RIVN recorded negative free cash flow of $849 million in Q2, reflecting intense financial demands of scaling production.
In short, the investment case rests on converting higher sales into stronger margins and lower cash consumption. The upcoming earnings release on Oct. 29 should offer the next assessment, with Rivian expected to post a loss of $0.86 per share, which would represent a 4.88% year-on-year decline.
Wall Street Remains Bullish on Rivian Automotive
Despite challenges, Wall Street analysts remain bullish as ever on Rivian Automotive heading into 2027.
The consensus rating on RIVN shares sits at “Moderate Buy” currently, with the mean price target of about $18.48 signaling potential upside of more than 50% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.