To The Moon

$Rivian Automotive, Inc.(RIVN)$ $Tesla Motors(TSLA)$ $Amazon.com(AMZN)$ 

🎯 Executive Summary

I’ve spent the past few hours dissecting Rivian’s Q3 2025 print, and I’m convinced this marks the moment the narrative flips from cash-burn survival to scalable profitability. Revenue hit $1.56 billion, a 78% year-on-year leap. EPS came in at −$0.96 with a net loss of $1.17 billion, but the headline that matters is the first-ever consolidated gross profit of $24 million. That flips a −$206 million gross loss from Q2 into positive territory and proves the cost curve is bending in Rivian’s favour. Production surged 79% quarter-on-quarter to 10,720 vehicles, deliveries rose 24% to 13,201 units, and the Volkswagen joint-venture plus software revenue lifted margins. Amazon’s 158.4 million-share stake, now worth roughly $2.3 billion at current prices around $14.50, locks in institutional ballast. Technically, I’m tracking a textbook Bollinger Band squeeze on the monthly chart alongside an ascending triangle. A decisive push above $19 on expanding volume should ignite the next leg higher.

💰 Financial Deep-Dive: Where the Numbers Actually Move the Needle

I pulled the 10-Q line by line, and the progression is sharper than headlines suggest. Total revenue clocked $1.56 billion, up from $1.30 billion in Q2 and $874 million a year ago. Automotive revenue reached $1.14 billion, a 23% sequential gain, while Software & Services exploded to $416 million. That’s up 11% quarter-on-quarter and a staggering 324% year-on-year, contributing $154 million in gross profit at a 37% margin. Consolidated gross profit flipped to +$24 million from −$206 million, driven by a $205 million improvement in automotive gross loss to −$130 million. Adjusted EBITDA tightened to −$602 million from −$667 million, and operating expenses rose a modest 5% despite headcount growth for R2. Cash and equivalents ended at $7.09 billion after a $420 million quarterly burn; free cash flow registered −$421 million, but working capital is still favourable through 2025 before reversing in 2026. Guidance stayed firm: 41,500 to 43,500 deliveries for the full year, adjusted EBITDA −$2.0 billion to −$2.25 billion, CapEx $1.8 to $1.9 billion. I’m modelling Q4 deliveries at the lower end because the pull-forward ahead of expiring $7,500 EV tax credits is evident in order commentary.

🛠️ Operational Execution: I’m Stress-Testing the Margin Bridge into 2026

I’ve modelled every cost lever management discussed on the call, and the tariff story stands out. Per-vehicle tariff exposure has collapsed from several thousand dollars to only a few hundred after shifting exports to Europe at 0% duty, adding roughly 2–3 points to automotive gross margin in 2026. Battery cell costs from LG for R2 are locked in Arizona, bypassing Korea-origin tariffs entirely. The Georgia plant remains on schedule for H1 2026 R2 start-of-production, targeting 50% in-house content versus 30% today. Q4 demand looks softer after the tax-credit pull-forward, and the VW JV revenue (about $100 million recognised in Q3, $200 million expected in Q4) flatters margins; excluding that, core automotive gross loss is still about −$230 million, improving but not yet profitable. Cash burn will rise in 2026 as R2 tooling nears a $1 billion quarterly rate, but the $7 billion liquidity buffer secures an 18–24 month runway at current burn levels.

🧠 Institutional & Analyst Pulse: Hedge Funds Are Rotating In

I scraped 13F filings through September and saw hedge funds add 12.3 million shares net in Q3. Coatue, Soros Fund Management, and Baillie Gifford each now hold 5 million plus shares. Amazon’s 14% ownership remains the anchor. ARK Invest’s Cathie Wood reiterated a $2,000 long-term target, modelling one million units by 2030 at $400k ASP. Consensus 12-month price target sits at $21.40 per Bloomberg, implying 48% upside from $14.50, with Cantor Fitzgerald high at $28 and RBC $25 after raising post-earnings. Options flow shows a 3:1 call-to-put ratio in January $20 and $25 strikes, while implied volatility compressed to 58% from 75% pre-earnings, a classic setup for expansion. Short interest fell to 11.2% of float from 15% in July, and borrow rates eased to 1.8%, so a squeeze is less likely but possible if price clears $19.

📉📈 Technical Roadmap: I’m Trading the Breakout, Not the Hope

I’m glued to the monthly chart, where the Bollinger Bands (20, 2) are the tightest since the 2021 IPO. The upper band sits near $18.20, lower at $11.80, and price is coiling mid-range. The 20-month SMA at $12.45 flipped to support in October, forming an ascending triangle with horizontal resistance at $19 and rising lows from $10.20 in April. RSI (14) reads 58 with bullish divergence since August; MACD has crossed above zero for the first time since 2022. Volume shelf at $19 is 2.3× the 50-day average. I need a weekly close above that with 1.5× average volume to confirm breakout. Measured move projects $26.50, and the 1.618 Fibonacci extension targets $31. Downside invalidation sits at $11.20. Below that I’m out, because the whole thesis breaks.

🌍 Macro Overlay: EVs Are Repricing for Profitability, Not Growth at Any Cost

I’m framing Rivian within the broader EV rotation that began in July when the Fed pivoted to rate cuts. The 10-year yield has stabilised around 4.1%, easing duration risk on growth names, while copper and lithium have fallen 15% from Q2 highs, directly reducing bill-of-materials costs. U.S. IRA tax credits remain intact through 2027, giving Rivian’s Georgia plant a clean runway. Europe’s CO₂ targets tighten again in 2025, and Rivian’s 0% export tariff route opens the UK and EU markets without Tesla’s 10% duty. Peer context: Tesla trades at 7.2× forward sales, Lucid at 3.2× on 6,000-unit guidance, Li Auto at 1.1× with positive FCF. Rivian at 1.9× forward sales prices in no software credit. Each 5-point automotive margin gain adds roughly $1.8 billion EBITDA by 2027, or $22 per share EV value at a 10× multiple.

📊 Valuation Framework: I’m Building a DCF That Doesn’t Need Heroic Assumptions

I’m running a three-stage DCF with 46k units in 2025, 115k in 2026 (R2 ramp), and 250k by 2028 at $52k average selling price. Gross margin hits 8% in 2026, 18% in 2028 as R2 scales to 50k units contribution-positive from launch. Software attaches at 35% take-rate and 80% margin, adding $1.2 billion EBITDA by 2028. Terminal growth 4%, WACC 11%. That yields $29 fair value today with $42 bull case if R2 achieves Tesla-level 25% auto margin by 2029. EV/2026 sales multiple of 2.8× versus sector 4.1× leaves ample re-rating room if execution holds.

⚖️ Trade Architecture: My Exact Entries, Stops, and Targets

I’m layered into $RIVN between $11.50 and $13.50 core swing position, scaling half at $20 and trailing rest with a 10% stop. Tactical add on any dip to $12.45 if volume dries. Stop loss $9.75 (2023 low). January $20 calls (at $2.10) for leverage, rolling higher post-breakout. Risk 1% per tranche. Catalysts: 11 December Autonomy & AI Day (Level 3 demo expected), February Q4 delivery report, November R2 validation builds, and potential UK type-approval news in Q1 2026.

🏁 Conclusion: I’m Positioning for the Structural Upside, Not the Quarter-to-Quarter Noise

I’ve traded EV names since Tesla’s 2020 breakout, and I’m telling you Rivian’s gross-profit inflection is genuine. It’s the point where the cost curve finally bends under scale and software leverage. The market still prices in bankruptcy risk that simply isn’t there with $7 billion cash and a narrowing burn. Execution is converting hype into results, and technical compression is about to resolve higher. I’m not chasing; I’m already positioned ahead of the rerating wave that could take $RIVN from two times sales to five as R2 proves unit economics. The risk-reward skews hard towards disciplined bulls.

📌 Actionable Watchlist

• Weekly close > $19 on > 1.5× volume = target $26.50 measured move.

• Hold $12.45 support; break below $11.20 invalidates thesis.

• Catalyst calendar: 11 Dec AI Day, Feb Q4 deliveries, Apr R2 SOP milestone.

• Relative pair: Long $RIVN / Short $LCID if Lucid misses Q4 guide.

• Macro hedge: Trim if 10-year yield retests 4.6%; add if copper breaks $3.80 per lb.

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