Why Ford Motor Stock Zoomed 44% in May But Has Hit the Brakes Since

I don't remember the last time Ford Motor (NYSE: F) shares sped up like this. The legacy automotive company completely shifted gears in May, positioning itself as an artificial intelligence (AI) play in a strategic move that sent its stock soaring 44.4% during the month, according to data provided by S&P Global Market Intelligence.

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What is the big Ford energy pivot?

There were rumors that Ford may enter the energy business. On May 11, Ford formally launched Ford Energy, which will operate as a subsidiary of the parent company.

Ford Energy will battery energy storage systems (BESS) for data centers, utilities, and large industrial customers. Operations cover the full battery cell manufacturing process, from the production of electrode coils to module assemble and after-sales service.

While investors were fretting over Ford's loss-making electric vehicles (EV) business -- the Model e unit posted $4.8 billion in operating loss in fiscal year 2025 -- recalls costs, and choppy cash flows, the company was working behind the scenes, building BESS manufacturing sites and securing supply chains.

Ford has repurposed its existing EV battery manufacturing plant in Kentucky to build BESS as it strives to enter a red-hot market. The AI boom has suddenly put massive pressure on existing power grids, forcing data center operators and utilities to secure more flexible power solutions and increasingly rely on large-scale storage to manage peak demand and grid instability.

Ford Energy's flagship product, the Ford Energy DC block, is a standardized 20-foot containerized BESS that can last 20 years.

Within a week of launch, Ford Energy signed a five-year agreement with EDF power solutions to provide up to 4 gigawatt hours (GWh) of DC BESS annually, with a total potential volume of up to 20 GWh over the term of the agreement. Ford expects first deliveries to begin in 2028.

Should you buy Ford stock now, or wait?

Analysts have high expectations for Ford Energy, with Morgan Stanley analyst Andrew Percoco valuing the business at $10 billion. Ford's licensing agreement with Chinese battery maker CATL is touted as a significant competitive advantage, as it allows Ford to license battery technology and carve out a space in the BESS market.

The rally in Ford stock, however, means some of the initial optimism is already baked into the current stock price. That explains why the automotive stock has hit the brakes in June, with shares already falling 14% so far this month, as of this writing.

The pullback serves as a stark reminder that despite its new energy business, Ford is still tied to the traditional auto market. Right now, its car sales are far from impressive. In May, Ford's total vehicle sales dropped 13.6% compared to last year, with EVs leading the decline with a 44% drop. Hybrids also slipped nearly 16%, while standard gas-powered vehicles fell 12%.

By pivoting underutilized EV battery capacity toward battery storage, Ford is essentially trying to catch the AI wave. I believe that's a really smart move, but I wouldn't expect Ford to always trade like a hyper-growth tech company. The energy business, however, could provide a solid cushion against a weak auto business, especially if it is as profitable as many expect. That's one gamble investors may want to make for this 4%-yielding stock.

Neha Chamaria 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.