General Motors GM Stock Resumes Uptrend as Strong Q2 Earnings Boost Morgan Stanley Outlook

Quick overview

General Motors shares have rebounded from key technical support after a stronger-than-expected second quarter, while Morgan Stanley sees further potential for the automaker, particularly across its North American operations.

GM Stock Rebounds From 200-Day SMA After Strong Earnings

General Motors (NYSE: GM) shares have recovered after coming under pressure during June, with the stock once again finding support around its 200-day simple moving average before rebounding toward the $80 level.

The recovery gained momentum following the company’s stronger-than-expected second-quarter 2026 financial results, which highlighted improving profitability, disciplined pricing, and stronger performance across its core North American operations.

GM Chart Daily – The 200 SA Holds as Support Again

The positive results also supported an optimistic assessment from Morgan Stanley on July 21, with the investment bank highlighting the strength of GM’s financial performance, particularly in North America.

The combination of better earnings and resilient operating performance has helped improve sentiment around GM stock after its recent pullback.

GM Delivers Strong Q2 Earnings Beat

General Motors reported adjusted second-quarter earnings of $3.57 per share, representing a 41.3% increase from the same period a year earlier.

The result comfortably exceeded the Zacks Consensus Estimate of $3.13 per share by approximately 14%.

The earnings outperformance was driven primarily by stronger-than-expected adjusted EBITDA from GM’s North American and international operations.

Revenue also exceeded expectations.

Quarterly revenue increased 1.9% year over year to $48.03 billion, surpassing the consensus estimate of $46.56 billion by around 3.15%.

The company benefited from stronger pricing, lower costs, and disciplined incentives.

Global wholesale vehicle volume also increased, rising to approximately 990,000 vehicles from 974,000 a year earlier.

Profit Margins Improve as Pricing and Cost Controls Deliver

GM’s adjusted earnings before interest and taxes increased 29.8% year over year to $3.94 billion.

The adjusted EBIT margin expanded to 8.2%, compared with 6.4% in the prior-year quarter, reflecting stronger core operating performance.

Pricing was a major contributor to the improvement, adding approximately $700 million to the year-over-year increase in adjusted EBIT.

GM’s product mix and tighter incentive discipline helped the company maintain stronger pricing power.

Cost performance contributed another $300 million, supported by lower warranty expenses, reduced tariff exposure, and savings linked to emissions-related regulatory costs.

However, some of these gains were offset by commodity inflation, logistics expenses, higher memory-chip costs, and increased manufacturing expenses associated with U.S. production onshoring.

North America Remains GM’s Strongest Growth Engine

GM’s North American operations delivered particularly strong results.

Revenue from the region increased 1.1% year over year to $39.91 billion, while wholesale volume remained relatively stable at approximately 848,000 vehicles.

A 31,000-unit decline in electric vehicle wholesale volume was offset by higher shipments of vehicles powered by internal combustion engines.

The segment’s adjusted EBIT surged 42.7% to $3.45 billion, exceeding the Zacks Consensus Estimate of $3.12 billion.

The adjusted EBIT margin improved by 250 basis points to 8.6%, supported by stronger pricing, incentive discipline, and operating efficiencies.

U.S. dealer inventory ended the quarter at approximately 511,000 vehicles, down around 3% year over year and remaining within GM’s targeted inventory range.

International Operations Deliver Mixed Performance

GM’s international operations also produced solid revenue growth, although profitability was more mixed.

Revenue increased 11% year over year to $3.69 billion, while wholesale vehicle volume climbed to 142,000 from 125,000.

Strong execution in South America supported revenue growth, although shipping disruptions affected wholesale volumes in the Middle East.

Adjusted EBIT declined 6.6% to $190 million but still exceeded the consensus estimate of $176 million.

Meanwhile, GM’s China joint ventures generated $83 million in equity income, an increase of 16.9% year over year.

The China business has now delivered its seventh consecutive profitable quarter, supported by cost efficiencies and improved product mix.

Morgan Stanley Sees Potential in GM’s North American Business

Morgan Stanley’s latest assessment reinforces the improving outlook surrounding GM’s core North American operations.

The investment bank’s analysis highlighted the company’s ability to exceed adjusted EBIT expectations while maintaining pricing discipline and improving operational efficiency.

The performance is particularly notable given continued uncertainty across the automotive industry, including changing consumer demand, elevated production costs, supply chain risks, and the expensive transition toward electric vehicles.

For GM stock, the strong earnings report has provided a fresh catalyst after the shares found support at the 200-day SMA.

The rebound toward $80 suggests buyers are regaining confidence, although the sustainability of the recovery will depend on whether GM can maintain pricing power and profitability in the face of ongoing industry challenges.

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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