"For a safer wager, you might just buy and hold Tesla ( NASDAQ:TSLA) stock since it's a well-known and widely analyzed company with a stake in the self-driving car market. On the other hand, Aurora Innovation stock is low-priced and under the radar, so it has the potential to explode higher. On the other hand, a recently released financial filing should remind investors that Aurora Innovation is still a "show-me" story."
"When a stock's price goes down 50%, it then has to go up 100% to fully recover the losses. That's why it's difficult to get back to breakeven after a steep drawdown. Aurora Innovation stock presents a textbook example of this. It traded at $10 as recently as February of this year, but AUR stock is currently close to $5. Thus, Aurora Innovation has to gain 100%, not just 50%, to get back to $10."
Aurora Innovation could capture significant upside if self-driving trucks achieve mainstream adoption, but substantial execution and financial risks remain. AUR stock declined from about $10 in February to roughly $5, requiring a 100% rally to reach prior levels. Tesla offers a lower-risk alternative in the autonomous vehicle market due to broader scale and analyst coverage. A recent financial filing reinforces that Aurora remains a "show-me" company, signaling that investors should emphasize capital preservation over speculative moonshot expectations. AUR has shown price bounces around $5 in late 2024 and July, reflecting high volatility and rapid moves in both directions.
Read at 24/7 Wall St.
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