Ford Motor Company (F) shares slid 4.64% to close at $16.63 on Monday, pulling back from a sharp rally in May as market participants reassess the potential of its energy storage business tied to artificial intelligence data centers. The stock continued to edge lower in premarket trading Tuesday, hovering around $16.56 ahead of the New York Stock Exchange opening.
The decline comes after a period where Ford shares had been increasingly valued less like a traditional cyclical automaker and more as a play on the growing demand for battery storage solutions. Over the past two weeks, investor sentiment has shifted to incorporate the prospects of Ford Energy, the company's battery storage unit that is targeting the booming AI data-center power market. This shift occurred against a backdrop of U.S. equity futures easing from record levels.
Monday's drop was notable as Ford underperformed the broader market. The S&P 500 rose 0.26% and the Dow Jones Industrial Average added 0.09%, while Ford's decline contrasted with mixed moves among peers. Tesla (TSLA) fell 4.57%, and General Motors (GM) slipped 0.67%. Trading volume in Ford shares surged to 95.4 million shares, well above the 50-day average of 58.2 million, indicating heightened investor attention.
The focus on Ford Energy stems from a recently announced agreement with EDF power solutions North America. Under the deal, EDF could purchase up to 4 gigawatt-hours (GWh) annually of DC Block battery storage systems from Ford Energy, with the potential for up to 20 GWh over five years. These containerized battery systems are designed to store energy for electric grids and large industrial users, with deliveries expected to begin in 2028. Lisa Drake, president of Ford Energy, emphasized that the unit is "not simply delivering hardware," while Tristan Grimbert, CEO of EDF power solutions North America, highlighted "supply chain reliability and product quality" as top priorities, signaling a focus on operational execution rather than financial engineering.
The rally in Ford shares was initially sparked by Morgan Stanley analyst Andrew Percoco, who noted a "fairly high likelihood" that Ford would secure storage supply agreements with major commercial clients and potentially hyperscale cloud and data center operators. Percoco also pointed to Ford's partnership with Chinese battery giant CATL as an overlooked competitive advantage in the storage market. However, analyst enthusiasm has since tempered. TipRanks reports that Percoco maintains a Hold rating on Ford with a $14 price target, observing that the stock has surged approximately 45% since early May, making further near-term gains less probable. Citi also holds a Hold rating with a $19 price target.
The push into energy storage comes as Ford seeks new revenue streams following a $19.5 billion writedown on its electric vehicle investments. According to Reuters, the company has repurposed space at its Kentucky plant originally intended for EV battery production to manufacture storage systems. This strategic pivot reflects Ford's effort to leverage its manufacturing capabilities in a rapidly growing market, even as its core auto business faces headwinds.
Barclays analyst Dan Levy estimates that Ford Energy could generate $3 billion in revenue and $300 million to $500 million in earnings before interest and taxes (EBIT). However, he cautioned that this outlook "should be balanced against questions of execution and ramp," noting that Tesla remains the leader in the storage space. The broader AI rally continued to support tech and data-center stocks, with Hewlett Packard Enterprise (HPE) gaining after earnings and other related names rising in premarket trade. Ryan Detrick, chief market strategist at Carson Group, remarked that the AI rally appeared "alive and well."
In the automotive sector, Tesla reported a 39.4% year-over-year increase in China-made EV sales for May, while BYD continues to exert pressure on foreign automakers in the Chinese market. Meanwhile, Chinese automakers such as BYD, Chery, Geely, and SAIC are expanding further into Europe, as Ford works to maintain its competitive edge in commercial vehicles in the region. Geely has even acquired a stake in a Ford plant in Valencia, Spain, according to a local trade outlet cited by Reuters.
Traders are now watching whether Ford shares can hold above Monday's close of $16.63 at Tuesday's open. If buyers step in, the AI-storage premium may persist; otherwise, further erosion of that premium could weigh on the stock as the session progresses. The debate over Ford's core auto business versus its emerging storage opportunities continues to divide Wall Street, with execution remaining the key variable.
