On May 22, Macquarie raised its rating on Xpeng Inc. (NYSE:XPEV) from neutral to outperforming the market, raising its target target from $22 to $24.

Eugene Hsiao of Macquarie made this upgrade after Xpeng's strong second-quarter 2025 report, another quarter that led the company to net profit. Xpeng's gross margin has improved over the past seven quarters, with Q1's gross margin of 15.6%. In the first quarter, the company's losses fell to about $91.6 billion from $190 million a year ago. Hsiao mentioned that the company's record delivery during the quarter seemed obvious. Xpeng's management expects the company to earn profits in the fourth quarter of 2025.

Assembly line for electric vehicles moving along production lines.

The company completed delivery of 94,008 vehicles in the first quarter. The company has revenue of approximately $2.2 billion, estimated to exceed $17.42 million. Xpeng's vehicle sales revenue soared more than 159% from a year ago, reducing losses compared to last year.

Hsiao added that Xpeng Inc. (NYSE:XPEV) now covers its previous scale challenges. Analysts believe that Chinese smart electric vehicle manufacturers can "start growth cycles" through their M03 and P7+ vehicles to regain their electric vehicle market share. Xpeng announced models for the 2025 G6, G9 and Mona Max, and the company hopes to start deliveries of the G7 and latest P7 models in the third quarter.

Xpeng Inc. (NYSE: XPEV) is a well-known Chinese smart electric vehicle manufacturer. It is engaged in the design, production and marketing of Smart EVs. Xpeng's famous vehicles include the SUV (G3) and the four-door sports sedan (P7). The company is mainly targeting the high-end electric vehicle market in the Chinese passenger car market.

Although we acknowledge the growth potential of XPEV, our belief is that some AI stocks have higher returns and limited downside risks. If you are looking for AI stocks that are more promising than XPEV and have 100x upside potential, check out our report Cheapest AI stocks.

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Disclosure. Nothing.