After Ford Soars 44% on AI Fever, Traders Want Proof It’s Real

Ford Motor Co. shares surged 44% in May on AI fever, and investors now want proof the rally is justified as the company prepares to report earnings. Morgan Stanley analyst Andrew Percoco said the market will react to Ford building a backlog that gives visibility to earnings opportunities expected in 2028. CEO Jim Farley called energy storage a "high growth, high margin, anti-cyclical market development" for Ford, and estimates for 2026 adjusted profits are up about 11% over the last three months.

Bloomberg -- 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. Most Read from Bloomberg - Chip Rout Deepens on Circular Funding, China Competition Fears https://www.bloomberg.com/news/articles/2026-07-28/korean-stocks-sink-as-chipmakers-plung-on-deepening-ai-fatigue?utm campaign=bn&utm medium=distro&utm source=yahooUS - S&P 500 Wobbles as AI Angst Offsets Oil Decline: Markets Wrap https://www.bloomberg.com/news/articles/2026-07-26/oil-tumbles-as-us-and-iran-pause-military-strikes-markets-wrap?utm campaign=bn&utm medium=distro&utm source=yahooUS Shares of the Michigan-based carmaker surged 44% in May as investors bet its battery-storage business would benefit from soaring power demand for AI data centers. 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 officer 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% 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 $10 billion and lead to agreements with hyperscalers.