AI "New Favorite" Ford Motor Company (F.US) stock price is heading towards the largest monthly increase in 17 years. Investors are highly focused on its electric vehicle battery business.

Ford Motor Company (F.US) stock price is heading towards its largest single-month increase in 17 years. This traditional automotive giant has unexpectedly ignited investors' enthusiasm as it is seen by the market as a potential beneficiary of the artificial intelligence boom. The stock of this car manufacturer based in Dearborn, Michigan has surged over 40% in May, marking its largest monthly increase since April 2009. In that year, Ford successfully navigated the financial crisis while its two major competitors, General Motors Company and Chrysler, were on the brink of bankruptcy, causing its stock price to skyrocket by 127% in a single month. On Friday, Ford's stock price rose for the eighth consecutive trading day, potentially setting a new record for the longest streak of gains in three years. As of Thursday's close, the stock price has reached its highest level since April 2022. Investors are currently closely watching Ford's electric battery business and the potential benefits it may receive from the massive demand for electricity from AI tools. However, Joe Gilbert, portfolio manager at Integrity Asset Management, remains cautious: "The company is not expected to be profitable in the battery storage sector until 2028, so the current market is more based on hope and imagination rather than facts." This surge began with Morgan Stanley analyst Andrew Percoco's report on May 12, pointing out that Ford's energy business could be valued at up to $10 billion and predicting that the company could soon strike deals with large-scale data center operators. The core logic is that Ford Energy will be able to provide battery energy storage systems for utility companies, data centers, and large industrial enterprises. Eric Diton, president and managing director of The Wealth Alliance, stated, "Considering Ford's electric vehicle business, energy storage is not out of reach for them." Electric car giant Tesla, Inc. (TSLA.US) has already entered the energy storage business. According to data, this sector accounted for 13.5% of Tesla, Inc.'s revenue in 2025. In contrast to Ford, other Detroit automakers have not achieved the same level of success. As of Thursday's close, General Motors Company (GM.US) saw a nearly 10% increase in May, and Stellantis NV (STLA.US) rose by about 13% in US-listed stocks. General Motors Company and Stellantis NV had forward price-to-earnings ratios of 6.4 times and 6.5 times, respectively. Haris Khurshid, chief investment officer at Karobaar Capital, said, "I believe more automakers will expand into adjacent areas such as energy storage, autonomous driving, infrastructure, and Siasun Robot & Automation. This is both a real strategic move and the market telling them 'Don't just be an automotive company.'" Ford's sudden shift from a traditional economic manufacturer to a concept stock in AI reflects a broader market trend where investors are looking for companies that will benefit from the massive construction of data centers and infrastructure. Over the past 12 months, Carter's Incorporated, known for yellow bulldozers, saw a surge of over 150%, while data center business drove Vertiv Holdings (VRT.US) to rise by 190%. Even Japanese flavor maker Ajinomoto saw a 55% increase in its stock price this year due to its insulation film used in semiconductor packaging. Khurshid pointed out, "The market's enthusiasm for 'AI-adjacent' areas is almost as strong as AI itself, and investors are willing to pay a huge premium for any theme related to long-term growth in AI or energy infrastructure." He stated that Karobaar is a long-term holder of Ford stock. For investors looking for the next AI winner, traditional industrial giants often offer a more cost-effective entry point than their tech counterparts. As of Thursday's close, Ford had a forward price-to-earnings ratio of 9.7 times, making it the 471st cheapest stock in the S&P 500 index. Although this valuation has expanded by 33% since April 30 due to the sharp rise in stock price, it is still well below the index's average price-to-earnings ratio of 21 times and the Nasdaq 100 index's valuation of nearly 25 times. However, some bearish investors are starting to look for an exit point. Data from S3 Partners shows that Ford stock has seen 22.3 million shares of short covering in the past 30 days as of Wednesday. Shorts have lost $395 million in market value calculated at the market price over the past 30 days, indicating that "as Ford's stock price rises, shorts are closing out their positions," according to Ihor Dusaniwsky of S3. Vanda Research data shows that retail investors are not the main drivers of this recent rally. Retail investor participation has been "relatively lackluster" and even "become a net resistance" in the past few trading days. Gilbert said, "Momentum is a powerful factor, and Ford's valuation is much cheaper than the market. But while the core business is okay, it's not outstanding, and fundamentals will eventually come into play."