Rivian (RIVN) shares soared on Friday, a day after the company held an Autonomous Driving and Artificial Intelligence Day and CEO RJ Scaringe agreed that an inflection point for autonomous driving is coming.
The company said its new Autonomy platform and software advancements in Large Driving Model (LDM), a self-driving model similar to Large Language Model (LLM) training, will extend its Universal Hands-Free (UHF) assisted driving to second-generation R1 vehicles, covering 3.5 million miles in the United States.
In 2026, a point-to-point hands-free system will be released, followed by hands-free and eyes-free autonomous driving products, with the ultimate goal of achieving “personal level 4” autonomous driving, which means that the vehicle will be able to drive completely autonomously without the driver’s attention.
“We realized we wanted to take a completely new approach to our Autonomy platform, so we started that process, which included developing a camera platform, a perception platform, redesigning the compute platform, and really building the whole system around an AI-centric approach where the vehicles on the road are part of a big data flywheel and we’re collecting data and using that data to train models,” Scaringe told Yahoo Finance at the Rivian event.
Buoyed by bullish sentiment and Wall Street commentary, Rivian shares jumped to a new 52-week high, closing up 12.1%.
Part of the company’s AI-centric approach is to build its own chip, called the Rivian Autonomous Processor (RAP1), which will power the self-driving features of Rivian electric vehicles. This is in stark contrast to the company’s previous approach of using Nvidia Orin chips in its self-driving computer modules.
Learn more about today’s market moves.
Wall Street has reacted favorably to Rivian’s approach to solving the autonomy problem through custom chips and internally developed autonomous software.
“RIVN marks the shift from OEM to [original equipment manufacturer] “We are leveraging artificial intelligence to build end-to-end autonomy,” Needham analyst Chris Pierce wrote in a note to investors on Friday.
Pierce said the company’s internally developed chips, computing architecture and vertically integrated autonomous platform will drive “a separation from traditional OEMs that still rely on third-party vendors.”
Pierce reiterated his buy rating on Rivian and raised his price target sharply from $14 to $23, a 64% increase. Pierce believes Rivian can drive faster iterations and cost optimization to build competitive advantage.
Pierce concluded that the real payoff will come in 2027, when the company reaches full production of the R2 vehicle, which will cost about $50,000 and offer “eyes-closed” and point-to-point autonomous driving capabilities.
