NIO Stock Forecast: Nio Inc extends decline following weak Chinese tech earnings

NYSE:NIO fell by 3.18% during Thursday’s trading session.
Weaker than expected earnings from Chinese big tech has sent ADRs reeling.
Nio branches out and delivers a fleet of electric police cars in Qingdao.

Stocks Reporter FXStreet

NYSE:NIO was a part of a larger group of Chinese ADR stocks that were dragged down by disappointing tech earnings in China. The Hang Seng index in Hong Kong fell by 1.3% during the day, marking the second straight negative session. Shares of Nio fell by 3.18% in sympathy and closed the trading day at $38.41. With the drop, Nio is on the verge of losing its key 50-day moving average, which would present a bearish short-term downtrend. Falling alongside Nio on Thursday were domestic rivals XPeng (NYSE:XPEV) and Li Auto (NASDAQ:LI) which were down 2.13% and 3.73% respectively during the session.

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The major news for Chinese ADRs on Thursday was the weaker than expected earnings report from Alibaba (NYSE:BABA). Earnings tumbled for the eCommerce giant, a result that was directly attributed to the ongoing regulatory crackdown by the Chinese government. Alibaba also slashed guidance for the rest of the year, lowering its expected revenue growth by 5-10%. Alibaba's rival JD.Com (NASDAQ:JD) saw its shares rise by 5.95% stateside as the company managed to top estimates and grow its annual active customers by 25% year over year.

NIO stock price

In some interesting news on Thursday, Nio has established a potential new customer base as it delivered its first eight electric vehicles to the Qingdao Police force. In July, Nio had signed a new agreement to make it easier for government agencies in China to acquire its vehicles, so we could see more of these deals made in the future. Nio also recently established a battery swap station in Qingdao, as well as a 180 kw charging hub.

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Stocks Reporter

FXStreet

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