CNBC's "Mad Money" host Jim Cramer said he recognizes NIO has been a hot one and"I'm not going to stick my neck out, but I'm not going to fight you if you like NIO."
In the show on October 15, Cramer rings the lightning round bell, which means he's giving his answers to callers' stock questions at rapid speed.
Regarding the recent big surge of Chinese electric vehicle (EV) maker NIO (NYSE: NIO), he said:
Oh my god, NIO. OK, so NIO was down ... it's been a straight line up. NIO is the Tesla of China. I've been recommending Alibaba, that's been my Chinese play. But I recognize NIO has been a hot one. I'm not going to stick my neck out, but I'm not going to fight you if you like NIO.
After surging 22.57 percent on Wednesday, NIO went up by another 5.92 percent to $28 on Thursday when the broad US market went down.
NIO's market capitalization has now reached $37.86 billion (RMB 253.5 billion), surpassing SAIC (600104.SH)'s RMB 239.5 billion and trailing only BYD (002579.SZ)'s RMB 356 billion, making it the second-largest vehicle-listed company in China by market capitalization, equivalent to the market capitalization of two Guangzhou Automobile Group (601238. SH) by market capitalization.
It's worth mentioning that NIO had its "life on the line". In March this year, NIO in the 2019 annual financial report warned that "cash is insufficient to support the working capital and liquidity required to continue operations for the next 12 months".
As of December 31, 2019, NIO had only RMB1,056.3 million in cash and cash equivalents, restricted funds, and short-term investments on its books.
In March of this year, NIO's share price hit a new low for the year of just $2.11 per share, and analysts have been bad-mouthing the company.
In just six months, NIO's share price rose more than 10 times.
JP Morgan analysts led by Nick Lai raised their price target on NIO sharply to $40 in a report released on Wednesday.
NIO shares closed at $21.62 on Tuesday, and JP Morgan's price target means NIO has 85% upside potential.
JP Morgan's last rating on NIO was Neutral and was made on June 21, when the price target was $14.
In its latest report, JP Morgan gave NIO an Overweight rating and admitted that "we missed the stock's major rally YTD."
The report said NIO remains attractive from a long-term perspective.
In the near term, according to JP Morgan, key catalysts would include:
1) anticipated solid 3Q results in mid-November, where we forecast GPM to further expand to ~12% vs. 8% in 2Q20.
2) Robust order backlog, in particular, the newly launched EC6 crossover model for which the wait time is around eight weeks due to initial production ramp and very strong demand.
3) A new sedan model scheduled to debut on "Nio Day" in December which should further enhance the company's current product portfolio (of two SUVs - ES8 and ES6, and one crossover - EC6).