Rivian Automotive, Inc. (RIVN) shares soared 7.75% during intraday trading on Tuesday, driven by a significant analyst upgrade and growing optimism surrounding the company's upcoming R2 sport utility vehicle.

The sharp rise follows an upgrade from TD Cowen, which raised its rating on the electric vehicle maker to "Buy" from "Hold" and increased its price target to $20 from $17. The brokerage cited bullish expectations for the debut of Rivian's more affordable R2 model, estimating full-scale demand at 212,000 to 335,000 units, which suggests potential upside to 2028 consensus estimates.

Investor sentiment was further buoyed by news that Rivian will introduce the R2 for the first time at the South by Southwest (SXSW) festival, with the company aiming to sell between 20,000 and 25,000 units of the vehicle this year. The R2 represents a key part of Rivian's strategy to expand its market following recent challenges with vehicle deliveries.