GM Up 14%, F Down 3% Since Q2 Earnings: Which Is the Better Buy Now?

U.S. legacy automakers Ford F and General Motors GM have moved in different directions since their second-quarter earnings reports. GM has gained 14.4% since reporting on July 21, while Ford is down 3% since its July 28 results. That divergence is notable because both automakers delivered stronger earnings and raised their full-year outlooks.

So, the question is not which company had the better quarter, but which one offers the more compelling opportunity from here. Both are navigating tariffs, uneven EV demand and high interest rates while trying to build businesses that extend beyond selling cars. Here's a closer look at the case for each.

The Case for General Motors

GM's biggest strength remains its North American truck and SUV business. Rather than using heavy discounts to drive sales, the company has maintained pricing discipline, keeping incentives below the industry average for more than three years. That approach is paying off. GM North America's adjusted EBIT margin recovered to 8.6% in the second quarter and 9.3% in the first half, putting the business back within management's 8%-10% target range.

Next-generation Chevrolet Silverado and GMC Sierra models, higher full-size SUV capacity and greater U.S. production could support both revenues and margins in 2027. Management has already raised 2026 adjusted EPS guidance to $12-$14 and expects 2027 results to exceed 2026.

General Motors has also built a stronger business in China, helped by restructuring and cost reductions. That helped China equity income more than double to $248 million in the first half from $116 million a year earlier. The company expects the business to remain profitable as it refreshes its lineup and streamlines operations.

GM is also building new revenue streams around its vehicles. OnStar and Super Cruise are expanding, with more than $3 billion of recognized and deferred revenues expected in 2026. It plans to add about 1 million subscribers and exceed 850,000 Super Cruise subscribers by year-end. GM Energy, GM Defense and GM Insurance provide additional avenues for growth. Meanwhile, strong cash generation has allowed GM to repurchase $2.8 billion of stock so far this year, with $3.5 billion remaining under the authorization. 

The Case for Ford

Ford’s truck and utility portfolio remains a major strength, while hybrids provide a useful middle ground as consumers remain divided between gas-powered and fully electric vehicles. The Maverick Hybrid posted record first-half sales, and the F-150 Hybrid led its full-size truck category.

Ford is also taking another shot at the mass-market EV opportunity with its upcoming Fathom electric pickup. Starting below $30,000 before destination and delivery charges, the vehicle could help Ford reach customers who have been priced out of many EVs. The company is working to make EV production more economical. Its new "assembly tree" manufacturing process is designed to simplify production and lower costs, potentially helping address the margin pressure seen with the F-150 Lightning.

Ford Pro is the company’s main earnings engine, supported by commercial vehicle leadership and recurring software and physical services. It generated $1.7 billion of EBIT at a 9.7% margin in the latest quarter, despite volume constraints, while paid Ford Pro Intelligence subscriptions surpassed 900,000. Management now expects 2026 Ford Pro EBIT of $7-$7.5 billion.

Ford Energy adds a new revenue stream by applying Ford’s battery manufacturing, service and monitoring capabilities to energy storage.Ford expects to reach 20 gigawatt-hours of annual capacity by late 2027. Financially, Ford ended the June quarter with $43.4 billion of liquidity, generated $2.1 billion of adjusted free cash flow and raised its 2026 FCF outlook to $6-$7 billion. Its attractive dividend yield of more than 4% adds to the stock’s appeal.

What Do Estimates for GM & F Say?

The Zacks Consensus Estimate for Ford’s 2026 and 2027 EPS implies year-over-year growth of 70% and 4%, respectively.

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The consensus mark for GM's 2026 and 2027 EPS calls for a year-over-year uptick of 25% and 11%, respectively.

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Valuation Check: GM & F

GM shares currently trade at 0.4X forward earnings, above its five-year average of 0.32X. Ford’s forward-to-sales ratio of 0.32 is lower than that of GM.

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Our Take

Both Ford and GM look strong enough for investors seeking exposure to the auto industry, and both currently carry a Zacks Rank #3 (Hold). But, if we have to pick one, Ford looks better at current levels. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GM has received a stronger vote from investors since its latest results, leaving more room for Ford to benefit from a reassessment. Its Ford Pro business provides a solid earnings foundation, while affordable EVs, hybrids and energy storage offer multiple avenues for upside. Ford also offers the more attractive combination of income and valuation support. That makes it the more compelling choice between the two.

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