Why Did GM Stock Suddenly Jump 20% Higher?
Key Points
GM shares are more than 20% higher in a little more than a week.
Management is making progress on curbing expenses related to tariffs and the EV market.
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Over the past eight trading days, the share price of General Motors (NYSE: GM) has popped. The stock closed at $58 a share on Oct. 20, and by Oct. 29 it was just below $70. That's a gain of more than 20% in little more than a week.
So, what's going on with the typically staid and boring automaker?
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Solid third-quarter results, which the company posted on Oct. 21, had a lot to do with it.
The company posted earnings per share of $2.80 on revenue of $48.6 billion. Both figures beat Wall Street expectations.
But perhaps just as important, GM management reassured investors that the company is making real progress in reducing tariff payments and is also adjusting well to the slowing demand for electric vehicles. The market has been concerned about the impact of tariffs and the sluggish EV business on GM's top and bottom lines.
Strong demand for trucks and SUVs
In addition, CEO Mary Barra told analysts on the earnings call last week that the company currently can't keep up with demand for full-size SUVs.
Image source: Getty Images.
As a result of strong demand for gas-powered trucks and SUVs, as well as curbed expenses, GM's management raised full-year 2025 guidance on adjusted earnings from a range of $10 billion to $12.5 billion to a higher range of $12 billion to $13 billion. That translates to adjusted earnings per share of as much as $10.50, when it previously expected $10 as its upper limit on EPS.
And as we all know, in the long term, share prices follow earnings.
Things are suddenly looking up for the American automaker, and investors are taking notice.
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Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.
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