Is Lucid Group, Inc. (LCID) the Best Low Priced Stock to Invest in For the Long Term?

We recently published a list of 10 Best Low Priced Stocks to Invest in For the Long Term. In this article, we are going to take a look at where Lucid Group, Inc. (NASDAQ:LCID) stands against other best low priced stocks to invest in for the long term.

As per AllianceBernstein, tariffs and trade wars have impacted investors of late. While some asset classes were spared, the US small-cap stocks have been hard hit. Over the past 6 months, the Russell 2000 Index has witnessed a decline of over ~10%. That being said, the investment firm opines that equity markets continue to show signs of broadening, which can work in favor of small-caps over time. The small-caps have underperformed in part since they are perceived as being more economically sensitive as compared to their larger-company counterparts.

What Lies Ahead?

The current circumstances are unique, says AllianceBernstein. Trade tensions can have a more significant impact on the broader US economy, but robust companies can still see earnings growth. The small-cap investors can also take a sigh of relief from the broadening market. The investment firm highlighted that, over the previous 30 years, small-cap performance remained particularly robust over the last 2 cycles of unwinding large-cap growth concentration, i.e., when markets start to broaden.

The 10 largest stocks accounted for over half the market capitalization of the Russell 1000 Growth Index by 2024 end, exhibiting a record high in the market concentration. Despite the trend reflecting the signs of unwinding, the concentration remains much higher as compared to the previous peaks. As per AllianceBernstein, small-caps are well-placed to benefit from the declining market concentration.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

Amidst Uncertainties, Focus on Quality Companies

AllianceBernstein opines that, while broadening markets have resulted in improved small-cap returns, timing the turn can be a difficult task. Typically, economic recoveries have fueled such transitions. In a bid to capitalize on the broadening market with an uncertain beginning, the firm believes that the best approach is to emphasize higher-quality companies. High-quality stocks tend to see reduced drawdowns when there is a contraction in the economy, and more upside when it sees expansion.

The firm also opines that small-cap stocks trade at extremely depressed valuations as compared to the larger companies, based on P/E ratios. Notably, the geopolitical tensions and macroeconomic worries have impacted the small companies. Without considering the company fundamentals, the investors have discounted potential hazards for such companies. Investing in firms exhibiting resilient business models can benefit along the road to recovery.

Our Methodology

To list the 10 Best Low Priced Stocks to Invest in For the Long Term, we sifted through financial media reports to make a list of 40 potential long term stocks. We focused on companies with a market cap of at least $2 billion with a share price below $10. We further refined our list to include stocks that had bullish analyst sentiment. We also mentioned the hedge fund sentiment around each stock, as of Q4 2024. Finally, the stocks were arranged in ascending order of their hedge fund sentiment.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Lucid Group, Inc. (NASDAQ:LCID)

Stock Price as of May 6: $2.33

Market cap as of May 6: $6.7 billion

Number of Hedge Fund Holders: 24

Lucid Group, Inc. (NASDAQ:LCID) is a technology company that is engaged in designing, engineering, manufacturing, and selling EVs, EV powertrains, and battery systems. Cantor Fitzgerald analysts maintained a “Neutral” rating on the company’s stock with a steady price objective of $3.00. The firm’s analysts demonstrated Lucid Group, Inc. (NASDAQ:LCID)’s confirmation of its FY 2025 vehicle production guidance of 20,000 units, which aligns with their projections. Furthermore, the analysts acknowledged the company’s strong partnership with Public Investment Fund (PIF) and its advanced technology, which they opine enables its vehicles to provide increased battery efficiency, longer range, better performance, and faster charging versus other EVs.

One of Lucid Group, Inc. (NASDAQ:LCID)’s critical strengths is its advanced EV powertrain technology. Its vehicles are known for increased battery efficiency, long range, and fast charging capabilities. Furthermore, the introduction of the Gravity SUV provides a major opportunity for the company to capture a share of the profitable SUV market. The company highlighted that Lucid Gravity is produced at AMP-1 with an AV capable sensor suite, redundant electrical and control architectures, as well as the latest SoC. Lucid Group, Inc. (NASDAQ:LCID) remains focused on cost effectiveness and supply chain efficiency. Through vertical integration, it has increased control over certain components going into its vehicles. At the same time, it continues to explore numerous strategic adjustments to better align with the changing landscape, which include vehicle price changes, tariff risk mitigation, and bifurcating the supply chain.

Overall, LCID ranks 7th on our list of best low priced stocks to invest in for the long term. While we acknowledge the potential of LCID as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than LCID but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.