Two months after Ford Motor Co. became the latest old-economy manufacturer to be swept up in the artificial-intelligence rally, investors are looking for proof the enthusiasm was justified.
Shares of the Michigan-based carmaker surged 44 per cent in May as investors bet its battery-storage business would benefit from soaring power demand for AI data centres . As the company prepares to report earnings after the bell Tuesday, they’ll be looking for updates on partnerships that confirm these expectations.
While excitement has cooled since Ford’s best month since the financial crisis, the stock remains above its pre-rally levels. That’s despite analysts warning that energy storage is still years away from turning a profit.
“The market’s going to react to them actually building a backlog, which gives visibility to investors that this earnings opportunity is somewhat secure,” Morgan Stanley analyst Andrew Percoco said. “The market’s not going to wait until you actually start to see the numbers come through in 2028.”
Sky-high valuations for megatech and companies that build semiconductors and other hardware have led investors to pursue more tangential inroads in the AI revolution. Industrial and auto stocks have been particular beneficiaries. The market has piled into bulldozer-maker Caterpillar Inc. and vehicle suppliers BorgWarner Inc. and Aptiv PLC, before turning to Ford, for their potential to aid in the autonomy buildout.
During the company’s annual meeting in May, chief executive Jim Farley called energy storage a “high growth, high margin, anti-cyclical market development for Ford.” Estimates for Ford’s 2026 adjusted profits are up about 11 per cent over the last three months, according to data compiled by Bloomberg.
It’s smart for Ford to try and compete in energy storage , and power systems are one of the biggest backlogs in AI, said Brian Mulberry, portfolio manager and chief market strategist at Zacks Investment Management, which owns Ford stock.
“It will highlight and elevate their brand as trying to be more modern and more in the moment,” Mulberry said. “I think it could be really additive to them.”
Percoco, who covered clean technology before autos , sparked the initial advance. He wrote that Ford’s energy storage business and partnership with Chinese battery-leader Contemporary Amperex Technology Co., or CATL, could be worth US$10 billion and lead to agreements with hyperscalers.
He still sees it as a great opportunity. Margins for electric vehicle maker Tesla Inc.’s energy unit are historically nearly double of those for the core car business and Percoco expects the same to be true for Ford as it scales its business. Tesla has offered energy storage for years, and the segment comprised more than 13 per cent of its revenue in 2025.
He sees Ford’s energy storage business ramping in 2027 and hitting its stride beginning in late 2028. In the meantime, management will have to provide incremental updates on partnerships to sustain investor excitement, said Percoco, who has an equal-weight rating on the stock.
In a sign that optimism over the business’s prospects remains strong, Jefferies analyst Philippe Houchois this week upgraded Ford’s stock to buy from hold, citing energy storage among the reasons.
Bank of America analyst Alexander Perry said in a July 15 note that investors will be focused on potential energy customer announcements. BNP Paribas analyst James Picariello said it will take several years, even beyond 2028, for Ford to scale up energy storage partnerships to meet its intended capacity.
So far, Ford Energy has struck a deal with EDF power solutions North America.
When General Motors Co. announced its own foray into the energy storage space, it didn’t rouse the market. GM’s investment in startup Peak Energy Technologies Inc. is relatively small, needs time to scale and lacks the name brand of Ford-partner CATL.
Ford shares have surged 20 per cent since the company last reported earnings in April. Over the same period, GM stock gained 14 per cent while Stellantis NV’s United States-listed shares sunk 26 per cent.
But with the exception of its recent outperformance, Ford has trailed GM when it comes to its core business. GM shares have jumped almost 60 per cent over the past five years compared with a 6.5 per cent advance for Ford.
GM’s second-quarter results beat analyst estimates and the company boosted its full-year profit outlook, sending the stock nearly nine per cent higher last week.
Ford may need to take more of a gamble to boost its brand and lift its stock price while its neighbour and competitor can rely on its core business, according to BNP Paribas’s Picariello, who has a hold-equivalent rating on Ford and buy-equivalent rating on GM.
“The numbers don’t lie. They’re not executing as well as GM. There are more gaps to fill for Ford, no doubt,” Picariello said.
—With assistance from Keith Naughton.