Ford Motor's stock price soared on Wednesday after Morgan Stanley analysts expressed optimism that the automaker's energy storage business could soon secure agreements with hyperscale data center operators.
The stock closed up 13%, recording its largest single-day gain since March 2020 and helping to turn its year-to-date performance positive.
Morgan Stanley analyst Andrew Percoco stated, "We believe there is a reasonably high probability that Ford signs energy storage system supply agreements with large commercial customers, potentially even hyperscale data center operators, in the coming months."
In a report to clients issued late Tuesday, analysts wrote that the Dearborn, Michigan-based company's agreement with CATL "provides an underappreciated strategic competitive advantage for its energy storage business."
Percoco estimated that Ford's energy business could be valued at $10 billion and suggested that as the company executes capacity expansion plans and begins building a steady order backlog, its valuation has the opportunity to approach the level of Tesla's energy business.
Ford Chief Financial Officer Sherry House, during an earnings call with analysts on April 29, stated that the company will invest $1.5 billion in its energy storage business this year, which she described as a "high-return growth opportunity."
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