NIO’s Options Activity Skyrockets: What Are Investors Betting On?

NIO, the Chinese electric vehicle (EV) company, has been making headlines again—but this time, it’s not about new cars or flashy tech. Instead, there’s been a massive spike in options trading, and analysts are adjusting their price targets in response.

For investors, this raises a big question: Is this a sign that NIO is gearing up for a comeback, or is trouble ahead? Let’s dive into what’s happening.

Investors Are Snapping Up Options Like Crazy

On March 10, 2025, options trading on NIO’s stock shot through the roof. Investors bought around 256,265 call options, a 43% jump over the usual trading volume of 178,787.

For those who aren’t deep into trading, call options are basically bets that a stock will go up in price. When there’s a big rush to buy them, it usually means traders think something good is coming.

So, what’s behind all this excitement?

Analysts Are Cutting Their Price Targets—Again

At the same time that traders are piling into options, analysts at some major firms are getting more cautious about NIO’s future. Here’s what’s changed:

• Goldman Sachs cut its rating from “Neutral” to “Sell” on November 25, 2024, slashing its 12-month price target to $3.90. They pointed to fewer new model launches and intense price wars in the EV space.
• J.P. Morgan followed up on February 4, 2025, dropping NIO from “Buy” to “Hold” and cutting their price target from $7 to $4.70. Their main concern? Slower production and weaker-than-expected demand.
• As of March 12, 2025, most analysts rate NIO as a “Hold”, with an average price target of $5.30. Some still see potential, with the highest target at $7.20, but the lowest is $3.90.

So, while some traders are betting big on NIO’s future, Wall Street analysts aren’t as convinced.

But NIO’s Stock Isn’t Falling—It’s Holding Strong

Here’s where things get interesting: despite all these downgrades, NIO’s stock has been holding up pretty well.

When J.P. Morgan downgraded the stock on February 4, 2025, you’d expect the price to drop. Instead, NIO’s shares actually went up 2.6%, closing at $4.39.

That’s not what usually happens after a downgrade. It suggests that investors might believe the stock is undervalued or that analysts are being too cautious.

Big Money Is Still Buying In

While analysts are lowering their expectations, some big institutional investors are doing the opposite—they’re buying more NIO stock:

• US Bancorp DE increased its holdings by 51.5%, now owning 88,108 shares worth $589,000.
• Van ECK Associates Corp boosted its stake by 4.3%, now holding 482,918 shares valued at $3.2 million.
• Principal Financial Group Inc. made the biggest move, more than doubling its position by 140.2%, now holding 75,100 shares worth $502,000.

When institutional investors increase their positions, it often means they see long-term potential—even if the short-term outlook isn’t great.

So, What Does This All Mean for Investors?

Right now, NIO’s stock is sending mixed signals. On one hand, the surge in call options suggests that traders see a rebound coming. On the other hand, analysts are lowering expectations, pointing to industry challenges.

Here’s what we know for sure:

• Bullish options traders anticipate that the stock will rise.
• Because of their caution, analysts have lowered their price predictions.
• The fact that large investors are still purchasing shows some long-term optimism.

The upcoming months will be crucial as EV competition heats up and NIO tries to maintain its position. We could observe a change in attitude if the business can increase sales and enhance output.

Whether you’re investing or just interested in the next big thing in the EV sector, this is a stock to keep a careful eye on for the time being.