What Happened?
Shares of automotive manufacturer General Motors (NYSE: GM) fell 2.9% in the afternoon session after the company announced a recall for over 23,000 of its 2024 Chevrolet Equinox EV models and separately placed 900 workers on indefinite layoff.
The recall was issued because the electric vehicle's pedestrian alert sound system might not have been loud enough to warn people nearby when the car was moving at low speeds. This failure meant the vehicles did not meet federal safety standards. In a separate development, GM laid off 900 workers at its Fairfax Assembly plant in Kansas. The company stated it needed to retool the plant for the production of the gas-powered Equinox model. The combination of a safety-related recall and production-related layoffs appeared to weigh on investor sentiment.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy General Motors? Access our full analysis report here, it’s free.
What Is The Market Telling Us
General Motors’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 11.1% on the news that the company reported fourth-quarter earnings and provided guidance that assumes a stable policy environment in the US, thus failing to help investors shrug off concerns relating to the impact of regulatory measures.
A key concern is the Trump administration's potential plans to reduce incentives like tax credits, which have helped accelerate the demand for EVs. If these plans are implemented, both GM and other EV players may need to rethink their growth forecasts. A Berstein analyst added following the earnings release "In our view, the guidance for 2025 leaves no room for errors, and also does not include impact from regulatory changes in the U.S., especially on tariffs and BEV support." On a more positive note, General Motors beat analysts' revenue expectations this quarter, and its full-year EPS guidance came in higher than Wall Street's estimates. Overall, this was a mixed quarter, which failed to clear up uncertainties.
General Motors is up 15.9% since the beginning of the year, and at $59.54 per share, it is trading close to its 52-week high of $61.34 from September 2025. Investors who bought $1,000 worth of General Motors’s shares 5 years ago would now be looking at an investment worth $1,955.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
