What happened
Shares of electric truck maker Nikola (NASDAQ: NKLA) may be down more than 20% so far in 2022, but that's much less of a year-to-date decline than shareholders saw just a week ago. That's because the stock has moved up nearly 20% just this week. As the market headed toward the close on Thursday, Nikola shares were up about 18% for the week, according to data provided by S&P Global Market Intelligence.
So what
Nikola's fourth-quarter and full-year 2021 results were released on Feb. 24, and some of this week's momentum in the shares is still coming from that update. The stock jumped on the day of the report, and it received another boost this week along with other names in the alternative energy sector.
Image source: Nikola.
Now what
In its recent operational update, Nikola management guided investors to expect meaningful revenue to begin coming this year. The company plans to deliver between 300 and 500 of its Tre battery electric vehicles (BEVs) to customers in 2022, generating revenue of between $90 million and $150 million. That guidance was based on real ongoing pilot programs with potential future customers. If the trial vehicles continue to perform well for customers, there's no reason to think those projections won't come to fruition.
That news helped investors feel more comfortable buying shares after the stock has dropped sharply. This week's gains are also attributable to the more general sentiment for alternative energy stocks as oil prices have soared.
In addition to its BEVs, Nikola plans to continue to progress toward bringing its hydrogen-powered fuel cell trucks to market this year. The company also told investors it expects to begin construction on a hydrogen production hub and to announce hydrogen dispensing station partnerships before the end of the year.
Companies intent on growing a hydrogen economy for transportation have gotten more investor support this week as fossil fuel prices have risen quickly. With its shares having already plunged, the combination of underlying business progress and more broad support for the industry has Nikola stock moving sharply higher this week.
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Howard Smith owns Nikola Corporation. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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