Tariffs were supposed to kill these two stocks. Instead, they are the most surprising winners of the year

General Motors and Ford have demonstrated unexpectedly strong financial performance and stock appreciation year-to-date, with GM up 32% and Ford up 41%, both notably outperforming Tesla despite broader economic concerns and trade tensions. Recent earnings reports for both automakers exceeded expectations, driven by robust revenue growth, market share gains—including record EV sales for GM—and positive guidance, attributed partly to a 'wealth effect' and anticipated lower interest rates. While these results highlight resilience, analysts advise monitoring key technical levels for both stocks, given their significant rallies and company-specific execution risks.

Analysis

General Motors and Ford have emerged as unexpected market darlings in 2025, with GM up 32% and Ford up 41% year-to-date, significantly outperforming Tesla. This strong performance is driven by a "wealth effect" sustaining affluent consumer spending and the Federal Reserve's recent rate cut, expected to bolster auto loan demand into 2026. Both companies reported robust recent earnings, beating expectations and raising guidance.

GM's stock surged 15% post-report, fueled by its highest U.S. market share since 2017 at 17% and record EV sales capturing 16.5% market share, with 2026 forecasting increased EV profitability. Ford achieved record revenue growth of 9% year-over-year and projects 32% EPS growth next year, positioning it among the top S&P discretionary stocks. While Ford offers a 4.5% dividend, it carries higher execution risk and is considered behind GM in its turnaround.

Given their significant rallies, technical levels warrant close monitoring for both automakers. Ford faces resistance at $14, with support at its rising 50-day average around $12. GM, after a powerful post-earnings surge, may see profit-taking, with a potential retest of the low $60s and a key downside protection level at $62.

Key Decisions for Investors

• Consider initiating or increasing positions in GM on any pullback towards the low $60s, using $62 as a key downside protection level, given its strong fundamentals and capital returns.
• For Ford, monitor a definitive break above $14 resistance as a potential signal to average up, while using the rising 50-day moving average around $12 as a critical downside trigger.
• Investors should assess Ford's higher execution risk and turnaround progress relative to GM, despite its attractive valuation and dividend yield.
• Factor in the ongoing "wealth effect" and anticipated lower interest rates as tailwinds for the broader automotive sector, but remain vigilant for shifts in consumer spending or monetary policy.