NEW YORK: Ford Motor Co shares recorded their best monthly gain in 17 years as the automaker’s newfound status as a possible beneficiary of the artificial intelligence (AI) boom sparked an investor frenzy.
The Dearborn, Michigan-based car company’s stock surged 44% in May, the biggest monthly advance since April 2009.
Back then, the stock climbed a walloping 127% as it managed to steer through the financial crisis even while its biggest rivals, General Motors Co and Chrysler LLC, tipped toward bankruptcies.
Ford shares rose for the eighth straight trading session last Friday, marking their longest winning streak in three years.
The rally has taken the stock to its highest level since March 2022, as investors became fixated on the automaker’s grid-battery business and its potential to benefit from the relentless demand for energy to power AI tools.
“The company conceivably will not make money in battery storage until 2028 so this is more about hopes and dreams than facts,” said Joe Gilbert, portfolio manager at Integrity Asset Management.
The stock’s torrid rally kicked off after Morgan Stanley analyst Andrew Percoco said in a note dated May 12 that the energy business could be worth US$10bil and predicted Ford could soon strike deals with hyperscalers.
The theory is that Ford Energy will be able to provide battery energy storage systems to utilities, data centres and large industrial firms.
Eric Diton, president and managing director at The Wealth Alliance, said that “energy storage is not a far stretch for Ford given its EV business.”
Electric-vehicle (EV) titan Tesla Inc has long offered energy storage. The segment comprised 13.5% of Tesla’s revenue in 2025, according to data compiled by Bloomberg.
“I do think you’ll see more automakers push into adjacent areas like energy storage, autonomy, infrastructure, and even robotics,” Haris Khurshid, chief investment officer at Karobaar Capital, said.
“Part of it is real strategy, but part of it is also the market basically telling them ‘don’t just be a car company.’”
The sudden transformation of Ford from a stodgy old-economy manufacturer to an AI laureate is the latest example of a wider market trend: investors are hunting for businesses that are set to gain from the mass buildout of data centres and other infrastructure that will be needed to support the expansion of AI applications.
“The market is rewarding ‘AI adjacency’ almost as much as actual AI right now,” with investors “paying a huge premium for anything tied to long duration AI or energy infrastructure growth,” Khurshid said.
Karobaar is a longtime holder of Ford stock, he said.
For investors looking for the next AI winner, industrial stalwarts often offer a much more economical entry point than their flashier tech peers.
Ford is the 461st cheapest stock in the S&P 500 Index, trading at 10.2 times forward earnings.
That multiple has swelled 40% since April 30 as the stock price soared, and yet it’s still far cheaper than the equity benchmark’s average price-to-earnings ratio of 21, and the technology-heavy Nasdaq 100’s average valuation of nearly 25.
“Momentum is a powerful factor and the stock has a valuation much cheaper than the market,” said Integrity Asset’s Gilbert, who doesn’t hold Ford and doesn’t plan to buy the stock for its energy business.
“The base business is okay but not great, and fundamentals will ultimately matter,” he said. — Bloomberg
