OpenAI’s ChatGPT has weighed in on the prospects of electric vehicle (EV) manufacturer Lucid (NASDAQ: LCID) making investors millionaires.
The AI’s outlook comes at a challenging time for LCID stock, which has dropped over 26% year to date. Lucid is trading at $2.22, down 0.22% as of press time.
Is Lucid a millionaire stock
ChatGPT offered a cautious “yes” with major caveats when asked whether Lucid could make someone a millionaire.
The model pointed out that Lucid, valued at around $7 billion, has an upside potential for attracting early-stage investors. Theoretically, such companies can deliver “multi-bagger” returns, where a stock multiplies five, ten, or even twenty times in value, potentially turning early backers into millionaires.
The company is expanding beyond its luxury Air sedan with the upcoming Gravity SUV, which is expected to launch at a premium price point. More importantly, Lucid plans to release a more affordable SUV under $50,000 to tap into the mainstream market. These efforts could significantly boost vehicle deliveries and revenue.
According to ChatGPT, the powerful Saudi Public Investment Fund (PIF) backs these ambitions. Notably, the company has invested billions and helped fund a manufacturing plant in Saudi Arabia, cementing Lucid’s global vision.
Lucid stock’s risks
However, the road ahead is risky. ChatGPT stated that Lucid continues to burn through cash rapidly, with projections pointing to significant outflows in the coming years. The company also has negative gross margins, meaning it loses money on every vehicle sold.
In Q1, Lucid reported a net loss of $731 million, up from $685 million last year. Despite the setback, it delivered 3,109 vehicles and posted $235 million in revenue—a 36% year-over-year increase.
Looking ahead, Lucid plans to more than double production to 20,000 vehicles in 2025, up from 9,000 last year.
The tool also pointed out that investors should be cautious about potential dilution. In this case, Lucid is expected to raise more capital to sustain operations, which could reduce the value of existing shares.
Meanwhile, the company’s leadership changes also remain a red flag for ChatGPT. In this case, LCID investors were rattled early this year when CEO and founder Peter Rawlinson unexpectedly stepped down.
Furthermore, the AI platform warned that future macroeconomic and political shifts, such as changes to EV subsidies or tariffs under a new U.S. administration, could further impact Lucid’s costs and demand. Already, a bill in the Senate has a provision to cut EV incentives, a move that might impact small manufacturers such as Lucid.
In short, ChaGPT summarised by noting that Lucid offers high-risk, high-reward potential. Therefore, investors with a strong appetite for risk and a long time horizon might see substantial gains.
However, for more conservative investors, the company’s speculative nature, operational hurdles, and financial instability may be too much to overlook.
Featured image via Shutterstock
