GM Stock Rises 20% This Year

General Motors (GM) has emerged as a standout performer in the automotive sector, with its stock rising approximately 20% year-to-date, fueled by improved profitability and robust truck sales. The company recently announced its Q2 2024 results, revealing a 7.2% year-over-year revenue increase to $48 billion, marking a record for the quarter. GM sold 696,086 vehicles during this period, a slight increase of 0.6% from the previous year, with full-size truck sales climbing 6% to 229,000 units. Despite a recent 11% wage increase following a new contract with the United Auto Workers (UAW), GM's operating profit guidance suggests the company is managing these costs effectively. However, the broader economic slowdown poses potential risks to consumer spending and the automotive market. Factors such as reduced production days and rising costs associated with transitioning to new models may indicate a cooling economic environment. While GM's stock has appreciated from $40 in early January 2021 to around $45, it has lagged behind the S&P 500, which saw a 40% increase during the same period. GM's inconsistent performance, particularly in 2022 and 2023, raises questions about its ability to maintain momentum in the face of high oil prices and elevated interest rates. Analysts are left to ponder whether GM will replicate its past underperformance or experience a resurgence in the coming year. Additionally, the slowdown in the electric vehicle (EV) market may provide traditional automakers like GM with an opportunity to capitalize on gas-powered vehicle sales while continuing to invest in long-term EV development.