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Nio surges after JPMorgan upgrades China electric vehicle play and says shares can nearly double

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Beijing auto show in 2020
Evelyn Cheng | CNBC

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Shares of Nio jumped 22.57% on Wednesday after JPMorgan upgraded the company to an overweight rating based on surging demand for electric vehicles in China. The firm also introduced a new June 2021 $40 price target on the stock, which implies an 85% rally from Tuesday's closing price of $21.62. The prior target was $14.

With Wednesday's pop Nio has surged more than 500% this year amid broad enthusiasm for the electric vehicle space. JPMorgan acknowledged that it missed out on the company's eye-popping rally, but the frim doesn't believe it's too late to get into the name.

Citi also upgraded Nio to a buy rating on Wednesday, based on a strong order backlog as well as the company's growing market share. The firm lifted its target to $33.20 from $18.10.

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