For years, the primary cloud hanging over Nio Inc (NYSE: NIO) has been its inability to translate technological brilliance into sustainable profitability.
Its persistent “cash burn” often scared away value-oriented investors, keeping the stock price under pressure despite rising delivery numbers.
However, that major overhang just evaporated. In a historic “profit alert” issued today, the Chinese EV maker said it expects to post its first-ever adjusted operating profit in the final quarter of 2025.
NIO is forecasting a non-GAAP profit between RMB 700 million (~$100 million) and RMB 1.2 billion – a stunning reversal from the RMB 5.5 billion loss seen just a year ago.
This massive swing blew past previous analyst expectations, which generally anticipated a much slower trek toward the break-even line.
Unsurprisingly, Nio stock is charging higher today, gaining nearly 9% in early trading as the market re-evaluates the firm’s financial viability.
Why NIO stock is a raging buy
The shift into profitability isn’t a fluke; it’s the result of a masterfully executed brand evolution. Nio has successfully evolved from a niche luxury player into a diversified, multi-brand powerhouse.
Its family-centric ONVO brand and the newly launched, entry-level Firefly lineup are no longer just concepts – they are already funneling thousands of units into the monthly delivery tally, broadening Nio’s reach into the mass market.
This expanded portfolio is the engine behind the ambitious 40% to 50% annual growth trajectory that management has confidently mapped out for the coming years.
By capturing both the premium and budget-conscious segments, Nio is scaling its infrastructure, proving that its unique battery-swapping ecosystem can support a high-volume, profitable business model.
This makes NIO stock a raging buy in 2026.
Nio shares are trading at compelling valuation
Despite the recent rally, Nio’s valuation remains remarkably grounded.
The stock currently trades at a price-to-sales (P/S) multiple of approximately 0.96x, a figure that sits well below its long-term historical average.
Perhaps more tellingly, this valuation is significantly cheaper than its US-based peers like Rivian (RIVN), making NIO shares appear like a high-growth tech disruptor priced at a deep discount.
Beyond hardware, investors are getting a massive “hidden” asset: a fleet of over 1 million vehicles on the road.
This massive mobile network serves as a goldmine of real-world data, fueling the development of the NIO WorldModel (NWM).
NWM is an advanced AI driving software that utilizes reinforcement learning to simulate complex driving environments, positioning Nio as a frontrunner in the global race for autonomous vehicle intelligence.
How Wall Street recommends playing NIO stock
Investors could also take heart in the fact that Wall Street remains bullish as ever on Nio stock for 2026.
According to Barchart, the consensus rating on NIO shares remains at “moderate buy” – with the mean target of $6.17 indicating potential upside of nearly 35% from here.
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