Is the current NIO share price an opportunity?
Electric vehicle manufacturer NIO (NYSE:NIO) has had an interesting few months. NIO share price slumps  Rewind to February 10 and the stock had just reached highs of $64 per share. As I write, the NIO share price has reached $45 for the first time in approximately two months. Prior to this price and shortly after its February high, the stock dropped as low as $30 per share. 5G is here  and shares of this sleeping giant could be a great way for you to potentially profit! According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air And if you click here well show you something that could be key to unlocking 5Gs full potential...  NIO stock has been affected by the ongoing semiconductor shortage globally. Semiconductors are essential parts in the manufacture of electric vehicles (EVs). This shortage is affecting other EV firms out there too, of course. Specifically to NIO however, the shortage means it has been unable to ramp up production. Its vehicle deliveries for Q1 2021 increased by over 400% year-on-year. And its Q2 forecast of vehicles delivered is current between 21,000 and 22,000. Although this is double what was delivered in Q2 2020, it is only growth of 5%-10%, which is well below market and investor expectations. This forecast wouldnt have helped the dwindling NIO share price. Upturn in fortunes  In the middle of May, NIO stock saw a turning point whereby the share price slump began to turn around. From $31 per share, it has risen over 40% to the current level of $45 I mentioned earlier. I believe this rise was due to the publication of data by the China Passenger Car Association. This data laid bare some issues NIOs competitor Tesla was having with vehicle sales. As a result of this, NIO became the best-selling EV brand for SUVs in China in the past month. With the sale of over 7,000 vehicles, its market share was close to 25% in China. This prompted the NIO share price to rise once more towards current levels and recover from its mini-blip. There are things I like about NIO. Firstly, production has increased consistently. This is likely to continue due to the opening of a new factory. Next, it has a large product range and is attempting to offer innovation its competitors cannot yet, such as battery swapping. This is something that not even Tesla has and should give NIO a unique selling point. Finally, it continues to expand into new territories. Most recently it launched in Norway. Such expansion and growth should boost the NIO share price, in my opinion. There are risks too, however. Firstly, the global semiconductor shortage has impacted NIOs production before. Worryingly for me, it cannot control this shortage, which means it remains susceptible to further production issues. The other issue I have is NIOs valuation. I believe it may be a bit bloated. Its market cap is $58bn, but in 2020, it only generated revenues of $16bn. I feel NIOs value is linked to its growth potential and not its performance. Any losses or setbacks could be harmful. I would not buy NIO stock just now. The bloated valuation and the fact it is at mercy to the semiconductor shortage put me off adding it to my portfolio. I admit it possesses a lot of growth potential, with the rise in demand for electric vehicles worldwide. Fow now, I will keep an eye on the share price and future developments.