GM Leads the Auto Sector in 2025
General Motors is shaping up to be the best-performing U.S.-traded automaker of 2025, handily beating rivals across the global auto sector.
Shares of GM closed Friday above $80 per share, up more than 55% year to date, surpassing the company’s prior annual record gain of 48.3% set last year. December alone has added nearly 13%, extending a streak of five consecutive months of gains, according to FactSet data.
For long-time GM bulls, the rally validates a long-running argument from management: that the stock had been materially undervalued relative to its earnings power.
“Great vehicles, innovative technology, and strong financial results will continue to set GM apart,” Barra said during the company’s October earnings call.
How GM Compares to Rivals
GM’s performance has clearly separated it from peers:
- Tesla: +17% in 2025
- Ford Motor: +34%
- Stellantis: −15%
- Toyota Motor & Honda Motor: modest gains
While much of the market has focused on EV narratives and AI hype elsewhere, GM’s rally has been driven by old-school fundamentals.
Why Wall Street Is Getting More Bullish
Analysts point to several core drivers behind the re-rating:
What’s working for GM
- Consistent earnings beats (EPS topped estimates in all but one quarter since 2022)
- Strong free cash flow generation
- Disciplined pricing and incentive management
- Aggressive stock buybacks
- Lower exposure to unprofitable EV segments as industry demand cools
The automaker’s third-quarter earnings report in October was a major inflection point. GM beat expectations, raised full-year guidance, and told investors that 2026 earnings are expected to exceed 2025 levels.
That single report triggered the stock’s largest weekly gain of the year — up 19.3% — and kicked off a wave of analyst upgrades.
Analysts Raise Targets Into 2026
Several major banks now see further upside:
- UBS raised its price target 14% to $97, naming GM its top auto pick heading into 2026
- Morgan Stanley upgraded GM to overweight with a $90 target
Morgan Stanley analyst Andrew Percoco highlighted GM’s superior margins and returns versus peers, citing disciplined inventory control and steady unit sales growth across North America.
Regulatory Tailwinds Add Support
GM has also benefited from policy shifts that favor traditional automakers:
- Looser U.S. fuel economy and emissions standards
- Removal of certain regulatory penalties
- Renegotiated trade terms with South Korea, a key GM manufacturing hub
- Industry-wide slowdown in lower-margin EV sales
UBS analyst Joseph Spak described GM as “effectively a North America-focused automaker,” positioning it well for a more relaxed regulatory environment.
CEO Stock Sales: Optics vs. Reality
During the rally, Mary Barra exercised options or sold approximately 1.8 million shares in 2025. While the sales totaled over $73 million, filings show she still owned more than 433,500 shares, valued north of $35 million as of September.
Much of her compensation remains equity-based.
Buybacks Remain a Priority
GM CFO Paul Jacobson made it clear that shareholder returns remain front and center:
“As long as the stock remains undervalued, the priority is to buy back shares.”
That message has resonated with investors looking for cash discipline over growth-at-any-cost strategies.
WSA Take
GM’s rally isn’t about hype — it’s about execution. In a market crowded with AI narratives and speculative bets, GM is being rewarded for predictable earnings, strong cash flow, and shareholder-friendly capital allocation.
If fundamentals continue to hold, Wall Street is signaling that this re-rating may not be finished yet.
Read our recent coverage on SoftBank Acquiring $4B AI Data Center.
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Disclaimer
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