Ford (F.US) 45% Gains Wiped Out: AI "Windfall" Expectations Fizzle, Stock Price Falls Below $12

According to Zhitong Finance APP, the previous strong rally in Ford Motor Company (F.US) has been completely wiped out, as American automakers face mounting economic pressure and market expectations for Ford to reap significant rewards from the AI boom have waned. The Michigan-based automaker’s stock fell as much as 2.8% on Wednesday before paring losses. The intraday drop pushed the stock below $11.99 for the first time since May, erasing the last remnant of a 45% gain made earlier this year when investors rushed in, betting its battery storage business would strike lucrative deals with AI companies.

"I think the AI halo won’t return until Ford truly starts generating returns from its battery storage division, and that’s a story for 2027 or 2028," said Joe Gilbert, portfolio manager at Integrity Asset Management. Gilbert did not buy the stock during the rally in May, and said the recent plunge has made him more confident in his skeptical stance.

High fuel prices, shaky US consumer confidence, soaring interest rates, and intensifying competition from international manufacturers are expected to pressure the automotive sector in 2026. Ford and its Detroit peer General Motors have both underperformed the overall market 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 Wednesday that supplier issues temporarily affected production of the F-150 pickup in the third quarter. The company expects to report quarterly sales data later this week.

After Morgan Stanley analyst Andrew Percoco said Ford’s energy storage business might strike deals with hyperscale cloud providers, Ford joined a list of traditional industrial companies being swept up in the AI hype. Investors piled into the stock, sparking Ford’s largest monthly gain in 17 years in May.

With valuations for tech giants and chipmakers soaring to dizzying levels, investors are chasing other companies that could benefit from the AI revolution, which has boosted shares in industrial and automotive stocks. Similar expectations also lifted shares of Caterpillar, which rose 70% over the past 12 months thanks to its power generation equipment business.

However, investors and analysts say Ford must demonstrate it is accumulating energy storage customer orders—especially in a business still years from profitability—if it is to maintain the appeal of its autonomous driving narrative. In its recent earnings report, Ford’s second-quarter results beat expectations and guidance was raised, but management provided no specific updates on energy storage or its customers. Despite a share price boost the day the results were published, the stock was sold off over the next six sessions, wiping out 10% of market value.

"We already knew in May that this business wouldn’t monetize until 2028, so that should have been priced in at the time," said Brian Mulberry, chief market strategist at Zacks Investment Management, which holds Ford shares. Mulberry called the recent pullback a buying opportunity, attributing most weakness to overall market sentiment.

Meanwhile, AI regulation and the construction of data centers have become political battlegrounds, possibly hindering the sector’s rapid growth. In addition, because Ford’s energy storage business relies on technology licensed from China, it has been criticized by the Trump administration. US Secretary of Transportation Sean Duffy has also criticized Ford’s joint venture with a Chinese automaker in Spain.

Ford rebutted Duffy’s criticism, stating that it manufactures more cars and employs more hourly manufacturing workers in the US than any other automaker.

Morgan Stanley’s Percoco, whose research catalyzed the recent rally, said potential regulatory pressure is a relatively minor factor in the share price decline. Instead, the recent weakness "is mainly driven by outlook concerns, especially 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 margins."

The analyst said he still expects the share price to respond positively in the future if Ford announces new energy storage customers or a growing order backlog.

As shares slide, Macro Risk Advisors’ chief technical strategist John Kolovos said the technical outlook looks bleak. He said if the stock continues to fall below $11.99, it will have to find a lower equilibrium level.

"This is a bad chart in both the short and long term," Kolovos said. "If it can quickly regain $13.50, the short-term outlook will improve, but there’s still a long way to go before it’s a long-term buy."