Some folks like to invest in ChargePoint (NYSE:CHPT) because it allows you to be brand-agnostic. By that, I mean you can hold CHPT stock and be part of the vehicle electrification movement without wagering on any specific automaker.
This makes sense, as all electric vehicles will require charging stations to keep them running. And while ChargePoint isn’t the only pathway to profits for investors, it’s among the most prominent leaders in the field.
If you’re going to buy a stake in CHPT stock, now’s as good a time as any. It’s an ideal growth opportunity, as the cumulative electric vehicle charging infrastructure investment in the U.S. and Europe is projected to reach approximately $60 billion by 2030, and around $192 billion by 2040.
In other words, ChargePoint is truly a company on the ground floor of a rapidly expanding addressable market. Moreover, the share price recently pulled back – meaning, enterprising traders can get in on the action at a reduced price point.
A Closer Look at CHPT Stock
I can fully understand the frustration regarding CHPT stock. Investors might be feeling seasick due to the stock’s up-and-down price action during the past year.
You might recall the time when the share price nearly hit $50 in late 2020. In hindsight, it’s easy to see that the bulls couldn’t possibly maintain that trajectory.
Thus, CHPT stock crashed to $20 in March of 2021 and oscillated like a heart monitor during the ensuing months. As of Aug. 11, the share price hovered near $25.
At the same time, ChargePoint’s trailing 12-month earnings per share was -$6.47. This fact might bother some prospective investors.
In response to that, I’d encourage people to keep an open mind as ChargePoint is definitely a work in progress.
CHPT stock is the type of investment that might yield substantial gains years from now, so patience is the key here.
Massive Federal Incentives
A major driver of ChargePoint’s growth over the coming years will, in all likelihood, be sector-wide assistance from the government.
The idea that electrification businesses will get a boost from the government isn’t far-fetched at all.
Currently, the Biden administration is seeking assistance from U.S. automakers to help America target 40% electric vehicle sales (as a portion of all vehicle sales) by 2030.
With that undoubtedly in mind, Evercore analyst James West connected the dots between the administration’s plans and the likely benefits for vehicle electrification companies.
West started with a bold prediction: “We expect massive Federal incentives to be announced over the coming weeks for the EV space.”
Then, the Evercore analyst followed up with something that’s undeniable: “Building the infrastructure required for wide-scale EV adoption will require cooperation between the federal government and corporations.”
Big Government Bucks
Here’s the thing: what West calls “cooperation” is practically guaranteed. Refusing to cooperate with the government isn’t something that corporations will want to do.
Furthermore, it’s not just the president who’s pushing for electric vehicle infrastructure spending.
The infrastructure bill which just passed through the Senate with bipartisan support, would allocate $15 billion to boost electric vehicle charging stations plus electric buses and other transit.
Apparently, experts on Wall Street are taking notice. Wedbush analyst Dan Ives even went so far as to call charging infrastructure a linchpin of President Biden’s electric vehicle initiatives.
Reportedly, Biden was said to push for a national network of 500,000 electric vehicle chargers by 2030.
This is definitely bullish for ChargePoint. Private enterprise will have to come to the rescue as the government calls for more charging stations nationally.
The Bottom Line
Don’t get too annoyed by the price action of CHPT stock. Just think of it as a long-term electrification play.
Sure, the stock price will probably wiggle and wobble for the remainder of the year. It requires vision and patience to ride out those waves.
Yet, the eventual rewards could be substantial. ChargePoint has indirect support from the government now, which could translate to strong revenues down the road.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the biedexmarkets.com.com Publishing Guidelines.