The Zhitong Finance App learned that due to increased economic pressure on US car companies and the cooling of market expectations for Ford Motor Company (F.US) to get rich returns from the AI boom, Ford's previous sharp rise has evaporated. Shares of the Michigan-based automaker fell 2.8% on Wednesday, then narrowed the decline. The intraday decline drove the stock below $11.99 for the first time since May, erasing the last remnant of the 45% increase earlier this year. Investors flocked in at the time, betting that its battery energy storage business would reach a lucrative deal with an artificial intelligence company.
“I don't think the AI aura will return until Ford actually starts generating returns from the battery energy storage division, and this is the story of 2027 and 2028.” said Joe Gilbert, portfolio manager at Integrity Asset Management. Gilbert did not buy the stock during the May rally, and he said the sharp decline made him more confident in his skepticism.
High fuel prices, unstable US consumer confidence, soaring interest rates, and increased competition from international manufacturers will put pressure on the automotive sector in 2026. Ford and its Detroit counterpart GM have both outperformed the market since this year, falling 8.1% and 5.3% respectively; as of Wednesday's close, the S&P 500 index had risen 12% over the same period.
Ford CEO Jim Farley also said on Wednesday that supplier issues temporarily affected F-150 pickup production in the third quarter. The company is expected to release quarterly sales figures later this week.
After Morgan Stanley analyst Andrew Percoco indicated that Ford's energy storage business may have reached a deal with hyperscale cloud service providers, Ford joined the list of other traditional economic manufacturing companies swept by AI hype. Investors flocked to buy the stock, driving it to record its biggest monthly gain in 17 years in May.
After tech giants and chipmaker valuations soared to dizzying levels, investors chased other companies that would benefit from the AI revolution, and industrial and automotive stocks benefited as a result. Similar expectations have also boosted the stock price of bulldozer manufacturer Caterpillar, which has risen 70% over the past 12 months, thanks to its power generation equipment business.
However, investors and analysts say that if Ford wants to maintain its appeal linked to the autonomous driving concept, it needs to prove that it is accumulating orders from energy storage customers, and that it is doing so in a business that is still several years away from being profitable. In recent earnings reports, Ford's second-quarter results exceeded expectations and raised guidance, but management did not provide specific updates on the energy storage business or its customers. Although the stock price rose on the day the earnings report was released, it was sold off for the next six trading days, and the market value evaporated 10%.
“We already knew in May that this business unit would not be monetized until 2028, so it should have been reflected in the price at that time.” Brian Mulberry, chief market strategist at Zacks Investment Management, said. The company holds Ford shares. Mulberry said the recent pullback was a buying opportunity and attributed much of the weakness to overall market sentiment.
At the same time, AI regulation and data center construction have become a political battleground and may hinder the industry's rapid growth. Furthermore, Ford has been criticized by the Trump administration because its energy storage business relies on technology authorized by China. US Secretary of Transportation Sean Duffy also criticized Ford's joint venture with Chinese automakers in Spain.
Ford countered Duffy's criticism, saying it makes more cars in the US and employs more hourly manufacturing workers than any other car manufacturer.
Morgan Stanley's Percoco, whose research has catalyzed this round of growth, indicated that potential regulatory pressure was a relatively minor factor in the fall in stock prices. In contrast, the recent weakness “is mainly driven by outlook concerns, particularly the potential impact of higher interest rates and gasoline prices on consumers, as well as continued commodity and logistics cost inflation and its pressure on profit margins.”
The analyst said that he still anticipates that if an increase in the backlog of energy storage customers or orders is announced in the future, the stock price will respond positively.
As stock prices declined, John Kolovos, chief technical strategist at Macro Risk Advisors, said that technical indicators looked bleak. He said that if the stock price continues to fall below $11.99, it will have to find a lower equilibrium level.
“This is a terrible chart, either in the short term or long term.” Kolovos said. “If it can quickly return to $13.50, it will improve in the short term, but there is still a long way to go before buying in the long term.”