NIO Inc

$NIO Inc(NIO.US)

Context: Nio stock broke the support $4 level, extending a rough three month slide of almost 30%. That short-term frustration sits against a very different earnings picture. NIO has started to show positive free cash flow and a small adjusted profit while still running a premium battery electric vehicle business that scales fast.The bullish pitch on NIO is that premium volume, margin repair and recurring services can carry the company toward a self funded growth model. Q2 hits several of those checkpoints. Deliveries rose to 107,658 with premium ES8 and ES9 anchoring mix, and vehicle sales reached RMB 29.1b. Vehicle gross margin of 18.5% and an overall gross margin of 18.4% line up with the margin recovery narrative, helped by tighter R&D. The bearish view is that NIO remains a capital hungry China focused EV company where scale does not reliably convert into profitable, less risky growth. Q2 chips away at that with a small non GAAP profit, 18.4% gross margin and positive free cash flow, plus a cash balance of RMB 56.7b that reduces immediate funding stress. However, revenue fell short of expectations, and Q3 delivery guidance of 108,000 to 111,000 units sits only slightly above Q2 levels despite prior record months, which tempers the idea of uninterrupted volume momentum. Management also flags rising material and chip costs of roughly RMB 14,000 per car versus late 2025 and a further RMB 2,000 to 3,000 per car expected, which keeps margin sustainability in question.

My Trade: I started my position too late after the stock already had its bullish run from late last year. Moreover, current share price sits back at $3+ with a P/S ratio of below 1, signalling potential undervaluation.

Takeaway: The miss versus revenue expectations and softer Q3 guidance show the path is not smooth, but the key profitability milestones are beginning to appear in the actual numbers. @Captain's Treasure

Rate hike odds are currently inflated at around 60+% following Warsh's hawkish stance and that inflationary pressures are pushing the FED to make a decision sooner than expected. I expect a turbulent month of September for stocks, but I think this is just a mini wave crash, not the capsize of the boat.

I'm still more concerned about us core PCE inflation at 3.3% yoy, way higher than fed 2% target. esp. when we're close to the next FOMC 16 sept; a rate hike is looking real. that said, there's still enough time for good news that can delay the hike.

Nio 2Q26 First Take: overall Q2 results were solid, while Q3 guidance was slightly below the street. At current trough valuation, downside from the softer guide looks limited.

Q2 results: ASP and margin beat. Product mix improvements kept pricing firm.

Q2 ASP reached RMB 270k, above the street's RMB 265k. Despite a sharp QoQ drop in ES8 mix, the flagship ES9, a higher-ticket SUV, backfilled. ASP slipped only RMB 3k QoQ.

Vehicle GPM was 18.5%, flat QoQ and above the 17.6% consensus. Management's earlier drivers played out: mix tilted toward higher-margin ES8/ES9 SUVs, and promo policies stayed stable across most models.

These positives offset part of the cost pressure. That pressure stemmed from higher lithium, copper, and memory chip prices.

Q3 guide: delivery and revenue guidance came in light. Both are below market expectations.

Nio guided Q3 deliveries at 108k–110k, vs. the street at 123k. With Jul and Aug at ~36k each, the guide implies Sep at only 36k–38k.

This suggests the initial launch buzz for the ONVO L80, ES9, and the 5-seat ES8 has faded as backlog cleared. New orders have normalized, leaving limited incremental upside in Sep.

ASP guide remains strong. Despite muted shipments, revenue guidance implies Q3 ASP rising to RMB 278k–280k from RMB 270k in Q2. Higher ES8/ES9 mix should support and lift vehicle margins.

While the Q3 volume guide flags softer near-term momentum, the stock already trades at <0.6x 2026 P/S. With pessimism largely priced in, even a soft near-term guide leaves limited downside at this valuation.$NIO Inc(NIO.US)$NIO-SW(09866.HK)$NIO Inc. USD OV(NIO.SG)

Capital is still rotating from tech outwards in a healthy fashion. Expected with the Fed chairman stating a more hawkish stance. Jobs data might be important with him reinforcing the labour data being a big factor in his decision.

I'm watching Nio and Broadcom's earnings this week. Nio has been under pressure in recent weeks and a good earnings can help push it up. On the other hand, Broadcom has been struggling among the AI chip companies, with valuation being a valid concern.

Markets continue to be resilient to close out August. Shall see what happens during the US mid terms. Anthropic IPO will be one to watch for me as well.