One of our best-performing stocks over the past month may come as a surprise — especially given all the market excitement around the current artificial intelligence-fueled rally, which has largely been confined to a select few mega-cap tech names. It’s Ford (F), whose stock has jumped 15% since its $12-per-share close on May 8. The S & P 500 , over that same stretch, has gained just 3%. Even with all those tech stocks, the Nasdaq has only risen 8.4% in the past month. F 1M mountain Ford Motor’s stock performance over the past month. Zoom in — and Ford stock has quietly shot more than 20% higher since May 25 when the automaker struck a partnership for its electric vehicles to use Tesla ‘s (TSLA) network of supercharges, starting early next year. Those share price gains include Friday’s bump after General Motors (GM) followed Ford and reached a similar deal with Tesla, whose stock has gained ground for 11 straight sessions. When granted access, current electric vehicles from Ford and GM will have to use an adapter at Tesla’s charging stations. However, both of Detroit’s big automakers have agreed to make their future EVs with a Tesla port instead of the industry-standard plug. The partnerships are being viewed by Wall Street as a win for all three companies. GM rose Friday, adding to its own 12% increase over the past month. Ford investors have been encouraged by the Tesla partnership since widespread access to EV charging is a major factor that can increase EV adoption and enhance the EV customer experience. Ford ranks a distant No. 2 in U.S. electric-vehicle sales behind Tesla, driven by high demand for its F-150 electric pickup truck, which has had its fair share of production challenges. Following the automaker’s Capital Markets Day in late May, which outlined a plan to accelerate EV production, investors regained confidence that Ford can reach its annual global run rate target of two million EVs by 2026. “I view this more as a positive for GM and Ford,” Gene Munster, managing partner at Deepwater Asset Management, said a CNBC interview Friday. He called the collaborations only a “slight positive for Tesla because they will pick up some infrastructure revenue but ultimately, they [Tesla] are giving the rails to these competitors which have been struggling.” “Traditional auto is in a really tough spot over the next decade in part because of infrastructure. That’s good news for Ford and GM, they’re going to be leveraging that,” Munster said. Looking ahead, other traditional automakers “can’t build their own infrastructure,” he added. “They have to adopt at this point,” suggesting they’ll also likely have to rely on a Tesla partnership. Bottom line Instead of expending hundreds of millions of dollars building out its own network, Ford made a disciplined decision to team up with Tesla, which already has an established EV charging network. Wall Street applauded the partnership, driving Ford shares over the past couple of weeks. One bearish case against Ford is that its guidance will need to be cut if the economy slows and credit conditions tighten. However, a key disconnect between management’s forecast and the Street leave room for future upside. Management guided to $6 billion in full-year adjusted free cash flow as part of its first-quarter release in early May, yet the Street isn’t a believer with the consensus estimate at $3.6 billion. If the company makes good on those numbers, the stock could go higher. Looking further out, Ford Model e, its EV business, is expected to reach an 8% EBIT profit margin by 2026 compared to its minus 40% in 2022. (EBIT stands for earnings before interest and taxes.) As it continues to build out EVs, reduces battery costs through new partnerships with top lithium producers , and leverages Tesla’s charging network, Ford’s value proposition, which we’ve believed in for some time, is starting to get noticed by investors. Ford is an inexpensive stock at about 7.6 times forward earnings estimates, with a roughly 4.4% annual dividend yield. (Jim Cramer’s Charitable Trust is long F. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
One of our best-performing stocks over the past month may come as a surprise — especially given all the market excitement around the current artificial intelligence-fueled rally, which has largely been confined to a select few mega-cap tech names.