We came across a bullish thesis on General Motors Company on Fixed Income Beacon’s Substack. In this article, we will summarize the bulls’ thesis on GM. General Motors Company’s share was trading at $80.79 as of February 26th. GM’s trailing and forward P/E were 9.06 and 6.07 respectively according to Yahoo Finance.
General Motors Company designs, builds, and sells trucks, crossovers, cars, and automobile parts worldwide. GM absorbed significant EV restructuring and tariff-related pain in 2025, but the damage was largely confined to accounting charges rather than core cash generation, reinforcing a constructive view on the franchise. Revenue declined modestly to $185.0 billion, while adjusted EBIT reached $12.7 billion. Net income, however, fell to $2.7 billion after more than $9 billion in special items tied primarily to EV write-downs, China restructuring, and Cruise.
Despite this reset, adjusted automotive free cash flow remained strong at $10.6 billion, comfortably funding $9.2 billion in capex, higher dividends, and $6.0 billion in buybacks. The balance sheet ended the year with roughly $5 billion in net automotive cash and leverage near 1.0x EBITDA, providing substantial flexibility.
The bulk of the earnings hit stemmed from roughly $7 billion in EV-related charges as management resized production to reflect slower-than-expected demand and shifting regulatory support. Rather than signaling retreat, this reset aligns capacity with realistic volumes and reduces the risk of recurring disappointments. Tariffs added another $3.1 billion in pressure, with more expected in 2026, but GM is responding through onshoring investments, pricing discipline, and supply chain adjustments.
Importantly, the ICE business remains resilient. GM retained U.S. sales leadership with 2.9 million deliveries, controlled incentives below industry averages, reduced dealer inventory, and sustained robust free cash flow generation. Software and services, including OnStar and Super Cruise, continue scaling with rising subscription revenue. With 2026 guidance pointing to EBIT improvement and stable free cash flow, GM appears positioned to recover earnings while maintaining balance sheet strength, supporting a bullish credit and equity outlook.
Previously, we covered a bullish thesis on Tesla, Inc. (TSLA) by Oliver | MMMT Wealth in April 2025, which highlighted Tesla’s long-term ambitions in autonomy, AI, robotics, and energy despite near-term delivery declines and margin compression. TSLA’s stock price has appreciated by approximately 75.13% since our coverage. Fixed Income Beacon shares a contrarian view but emphasizes General Motors’ cash flow resilience and balance sheet strength.
General Motors Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 71 hedge fund portfolios held GM at the end of the third quarter which was 71 in the previous quarter. While we acknowledge the risk and potential of GM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than GM and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
