GM Stock Goes Up on Tariffs! Should You Buy?

2025-10-22

General Motors (GM) just shocked the market with a 15% surge after reporting stronger-than-expected third-quarter earnings and raising its full-year profit outlook. The Detroit automaker managed to beat Wall Street’s expectations even as new U.S. auto tariffs threatened to disrupt supply chains.

Now that GM shares are trading near $67, investors are wondering whether this rally has more room to run — or if it’s time to take profits after the big move.

Key Takeaways

GM stock rose 14.86% to $66.62, its biggest single-day gain of the year.
The company raised full-year EBIT guidance to $12–13 billion, up from $10–12.5 billion.
Adjusted EPS is now expected at $9.75–$10.50, versus previous guidance of $8.25–$10.00.

Why GM Stock Surged

GM’s latest rally was driven by one thing: confidence. Despite navigating billions in new auto tariffs, the company showed strong operational performance and reassured investors that 2025 profits remain on track.

CEO Mary Barra announced that full-year earnings would exceed previous forecasts, citing better-than-expected domestic production efficiency and tariff mitigation measures.

In her shareholder letter, Barra wrote:

“Based on our performance, we are raising our full-year guidance, underscoring our confidence in the company’s trajectory. The MSRP offset program will help make U.S.-produced vehicles more competitive over the next five years.”

That statement hit the market like a jolt. Investors cheered GM’s ability to turn policy pressure into profit growth, proving that the automaker can adapt quickly to macroeconomic headwinds.

Q3 Earnings Breakdown

GM’s third-quarter performance exceeded nearly every major expectation:

Net revenue: $44.26 billion (vs. $45.18 billion estimate — a minor miss but overshadowed by profits)
Adjusted EPS: $2.80 (vs. $2.27 expected)
Adjusted EBIT: $3.38 billion (vs. $2.72 billion forecast)
Tariff costs: $1.1 billion (partially offset by mitigation programs)

Crucially, GM’s incentives as a percentage of average transaction price (ATP) were just 4%, far lower than the industry average of 6.9%. This means GM didn’t need heavy discounts to move inventory — a sign of pricing power and strong demand.

Tariffs: Threat or Opportunity?

At first glance, new U.S. auto tariffs under President Trump’s trade policy seemed like bad news for carmakers. However, GM managed to reduce its total exposure from up to $5 billion to as low as $3.5 billion, thanks to internal cost adjustments and the government’s new MSRP offset program.

This policy effectively allows manufacturers with U.S.-based production — like GM — to regain competitiveness against imports over time. The company is also investing $4 billion to expand U.S. manufacturing capacity, further minimizing exposure to cross-border tariff risks.

Analysts at CFRA praised GM’s agility:

“Management’s ability to raise guidance despite tariff headwinds of $3.5B–$4.5B demonstrates effective mitigation and operational flexibility.”

The EV Slowdown

While GM’s combustion-engine vehicles remain a profit powerhouse, its electric vehicle (EV) division hit some turbulence.

EV sales surged to a record 66,501 units in Q3, boosted by customers rushing to claim the $7,500 federal tax credit before its expiration. But with incentives ending, the company expects near-term EV demand to cool.

GM also took a $1.6 billion charge related to its EV restructuring:

$1.2 billion in non-cash charges for capacity adjustments.
$400 million in cash costs from contract cancellations and commercial settlements.

As part of this recalibration, GM will end production of its BrightDrop EV delivery van, citing weak demand and higher tariff costs for vehicles imported from Canada.

Barra explained:

“With the evolving regulatory framework and the end of federal consumer incentives, it is now clear that near-term EV adoption will be lower than planned.”

Despite this, GM remains committed to long-term electrification, focusing instead on cost efficiency and targeted market segments rather than overexpansion.

Gas Vehicles Drive the Comeback

Interestingly, traditional vehicles carried GM’s Q3 performance. The Chevrolet Silverado and GMC Yukon were standout performers, benefiting from strong U.S. demand for large pickups and SUVs.

GM sold 710,347 vehicles in Q3, up 8% year-over-year, reclaiming the No. 1 spot in U.S. market share for the first time since 2017. These results prove that GM’s core combustion segment still delivers the majority of its profit — a critical stabilizer amid shifting EV dynamics.

Analyst Views and Market Sentiment

Wall Street responded enthusiastically to GM’s report. The 15% rally reflects both earnings relief and optimism about tariff mitigation strategies.

Analysts believe GM’s cost discipline and pricing power could sustain the momentum into 2026:

CFRA Rating: Buy, price target $75.
Morningstar: Maintains “Outperform,” citing improving margins in North American operations.
Morgan Stanley: Upgrades to “Overweight,” expecting upside from increased domestic sourcing and production.

However, some analysts warn of short-term volatility as the EV restructuring plays out.

Technical Analysis: Breaking Resistance

On the charts, GM’s stock shows a clear breakout pattern. After months of trading in the $50–60 range, the stock surged above $66, marking a new yearly high and its strongest momentum since early 2022.

The rally pushed GM firmly above its 200-day moving average, turning prior resistance into new support. If bullish momentum continues, the next resistance zone lies near $70–$72, which could serve as a short-term target.

However, traders should note that rapid rallies often lead to brief consolidation phases before continuing higher.

Should You Buy GM Stock Now?

From a fundamental standpoint, GM’s performance in Q3 2025 proves its resilience. The automaker successfully:

Raised guidance despite tariff headwinds.
Maintained strong pricing power in its U.S. lineup.
Balanced EV restructuring without derailing profitability.

At the same time, risks remain. The end of EV tax credits, ongoing trade tensions, and rising costs could create short-term pressure.

For long-term investors, GM presents a compelling case as a value-oriented industrial play with a strong dividend outlook and renewed growth trajectory.

For short-term traders, it might be best to wait for a consolidation pullback toward $63–$64 before entering new positions.

Final Thoughts

GM’s remarkable turnaround this quarter highlights why it remains one of America’s most strategically positioned automakers. The company’s ability to raise profit guidance amid tariff turmoil speaks to operational strength, cost control, and adaptability.

While EV headwinds may limit growth in the near term, GM’s fundamentals — including $10–11 billion in free cash flow and improving margins — suggest a steady path forward.

With shares breaking higher and investor sentiment improving, GM could continue to outperform if macro conditions remain stable.

Still, patience and disciplined entry points will be key for those considering jumping in after the rally.

FAQs

Why did GM stock go up?

GM raised its full-year profit guidance and showed strong Q3 earnings despite tariff pressures, signaling improved operational efficiency and demand.

How much is GM’s expected EBIT in 2025?

GM forecasts full-year EBIT between $12 billion and $13 billion, up from previous estimates of $10–12.5 billion.

What are GM’s main challenges now?

Tariff exposure, higher costs from EV restructuring, and the expiration of U.S. EV tax credits could weigh on short-term performance.

Is GM stock a buy?

GM looks attractive for long-term investors given its strong balance sheet and profit growth, but near-term traders should wait for a pullback.

What is GM’s stock price target?

Analysts’ consensus target ranges between $70 and $75, reflecting moderate upside potential from current levels.

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Disclaimer: The content of this article does not constitute financial or investment advice.

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