Ford Energy has big plans, but car sales need to support that segment.
Ford's May sales report tempered excitement surrounding its new energy subsidiary.
Buyers were snapping up hybrid vehicles from Ford's competitors last month.
After surging higher for several straight weeks, Ford Motor (NYSE: F) stock is giving back some of those gains this week. As of late Friday trading, Ford stock was down about 15.5% for the week, according to data provided by S&P Global Market Intelligence.
Even so, shares have gained nearly 30% over the past month after the company announced the formation of a new Ford Energy subsidiary. Ford is trying to tap into surging demand for energy solutions from AI data center operators with battery storage systems.
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But the stock may have gotten ahead of itself on that news. It didn't help that Ford's May sales numbers weren't impressive, either.
Image source: The Motley Fool.
While the company might have ambitious plans and solid prospects for Ford Energy, the company still needs to do well at what it does best. Investors bidding the stock higher over the last month got hit with a dose of reality with the company's May sales release this week.
Ford's overall vehicle sales, including its Lincoln brand, slid nearly 14% last month compared with last year. The affordable Maverick pickup truck remained popular, but sales of most other models were disappointing. Hybrids remain popular with car buyers, but Ford's hybrid segment reported a 15.7% drop. Competitors, including Hyundai and Kia, saw electrified models surge in May.
The excitement surrounding Ford's new push into energy storage systems may have faded this week. But if that segment reports strong customer interest, this dip may be a good entry point for Ford stock.
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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.