WeRide (NASDAQ:WRD) stock has surged significantly late last week. It reached an intraday high of 146% before it closed up 83.46% at $31.5. Why did WRD stock rise so much? Should you still buy the stock? Here’s what you need to know:
WRD stock is up due to Nvidia (NASDAQ:NVDA) disclosing a purchase of approximately 1.74 million shares of WeRide in a recent 13F filing. This is worth about $58 million. Nvidia’s previous investments turned out very well. It invested in SoundHound AI (NASDAQ:SOUN) and Applied Digital (NASDAQ:APLD) earlier, and Nvidia ended up with a hefty gain, though it has sold SOUN recently.
Money Morning’s equity analyst CJ spotted this AI stock all the way back in November.
WeRide specializes in autonomous driving technology, especially Level 2 to Level 3 automation. It is headquartered in Guangzhou, China, but it has expanded significantly and holds driverless permits in the UAE, Singapore, and in the U.S.
It has a platform that offers end-to-end AI models and a sensor suite with LiDAR and cameras. It also has an HPC 2.0 computing platform that delivers 1,300 TOPS of AI processing power for high-speed maneuvers and low-light conditions.
WeRide reported $10.3 million in Q3 2024 revenue, down 5.7% year-over-year and the average price target of $22 implies 30% downside risk from here. Analysts expect $62.2 million in full-year 2024 revenue and $141.2 million in full-year 2025 revenue. This means you’re paying 61 times forward sales.
This is for a company that is deeply unprofitable and isn’t expected to post profits anytime soon. The stock may still climb up from here, but buying at this range doesn’t seem to be a smart long-term play. It is a speculative buy at best.
