Is Ford Stock Now an AI Play, Too?

Key Takeaways

• Ford’s stock rose close to 47% in May, driven by the announcement of its new energy storage business and growing data center demand.
• The automaker’s core business remains strained as investors make early bets on a potential new growth engine.
• Ford’s energy division is years away from generating profit, according to Morningstar’s David Whiston.

Ford F stock surged nearly 47% in May, making for its best month since April 2009, as investors hitched onto an unexpected growth story for the automaker: energy storage. The firm’s newly launched Ford Energy sparked the rally, as investors began treating Ford as a potential beneficiary of the growing energy needs of data centers used for artificial intelligence.

The question is whether the new energy division can become a profitable business, or if AI excitement is getting ahead of the company’s ability to execute. Ford has faced challenges in its core automotive business that continue to weigh on its stock, including recent losses in its electric vehicle business, tariffs, and cost pressures.

Ford stock climbed from roughly $12 per share to nearly $18 in late May before pulling back slightly to end the month. The stock has risen 11% in 2026, with the company’s energy play pushing shares to their highest level since February 2022.

The May rally reflects growing optimism that Ford’s energy storage ambitions could create a new source of growth beyond automobiles. That said, Morningstar senior equity analyst David Whiston says the market may be overestimating, since the business is not expected to generate revenue for several years. “Ford Energy was announced by the company late last year, and the market really didn’t do anything,” he says. “All of a sudden, the market decided to view Ford as a data center play.”

Ford Pivots From Loss-Laden EVs to Energy

Ford officially launched Ford Energy in May and announced plans to repurpose its electric vehicle battery facilities for battery storage. In a five-year plan, the company aims to produce 20 gigawatt-hours of capacity through a partnership with EDF Power Solutions North America, a utility company specializing in wind, solar, and battery projects. The venture remains a long-term proposition, as deliveries will begin in 2028.

Ford’s energy storage play stems in part from the challenges facing its electric vehicle business. Since 2022, the company has lost more than $16 billion from its EV segment. Slower-than-expected EV adoption and the rollback of federal EV tax incentives have weighed on EV battery demand, which prompted Ford to close its Kentucky battery plant in December 2025 to prepare for the energy storage transition.

Ford also announced a shift toward hybrid and gasoline-powered vehicles while looking for new ways to monetize its battery investments. While the company has reported multibillion-dollar losses in its EV segment, Whiston says Ford Energy offers a potential avenue for recouping those losses.

“With EV interest falling off, [Ford] reallocated some of the capacity to make the Ford Energy business,” Whiston says. “The energy business should be accretive for them eventually, but it’s going to take quite a while for it to scale up.” The pivot arrives amid a growing energy crisis spurred by the Iran war. American companies have sought to become battery energy storage system suppliers to compete internationally. Whether Ford can succeed depends on how it scales its business, Whiston says.

Risks Still Hang Over Ford’s Auto Business

Despite the excitement surrounding Ford Energy, the company continues to face significant challenges in its core automotive business. Whiston says that Ford has struggled with cost controls, warranty expenses, and lower profit margins compared with competitors like General Motors GM. He adds that, like other American automakers, Ford has borne the brunt of high tariffs, which have burdened raw material sourcing and shifted the company’s production volumes and operations.

Struggles to source aluminum and other raw materials used to make the exteriors of Ford’s highly profitable F-series pickup truck lineup are expected to cost the firm $2 billion, according to its recent earnings call. Additionally, Ford adjusted its profit guidance after a fire at its Novelis plant in Oswego, New York, set back aluminum production, costing the company $1.5 billion-$2.0 billion before taxes and interest.

Ford has trailed GM in profitability, a trend that has weighed on investor confidence and limited the stock’s performance relative to its rival. “GM has consistently been executing better than Ford for a number of years,” Whiston says.

Is Ford a Profitable AI Play?

While Ford Energy could eventually become profitable, Whiston says it’s currently a small part of the automaker’s total operations. The company generates around $180 billion in annual revenue. He thinks the new division is unlikely to contribute meaningful profit until late 2027 at the earliest. Overall, he’s cautious about the company’s near-term earnings outlook.

Whiston says the biggest risk is that the firm could fall back into a pattern of inconsistent performance: “[Ford] just needs to keep having really good news on earnings day and stop the pattern of one step forward, one step back.”

Morningstar assigns Ford a High Uncertainty Rating because of the cyclical nature of the automotive industry and the company’s ongoing execution challenges. Our fair value estimate for Ford remains $19 per share, as the company has begun to handle its costs and warranty expenses better.

Whiston is skeptical of whether the Energy business, which remains a small part of Ford, can turn the company around on its own. Investors are betting that Ford can compete in the energy storage market, even though profits remain years away. “I think it’s people just trying to get rich quickly, hopping on the data center and AI bandwagon,” he says. “Ford Energy is still in its developmental stage. They don’t have any business yet.”