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Ford vs. Tesla: Which Stock Looks Better After Strong 1-Month Gains?
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Key Takeaways
Ford raised its Ford Blue 2026 EBIT outlook to $4.5B-$5B on stable demand and execution.
F expects Ford Pro EBIT of $6.5B-$7.5B as software and service revenue grows.
Tesla raised capex to $25B as AI, robotaxi and Optimus spending accelerates amid delays.
Over the past month, shares of U.S. legacy automaker Ford (F - Free Report) and electric vehicle tech giant Tesla (TSLA - Free Report) have rallied more than 23% and 15%, respectively, outperforming the industry. Despite weakening vehicle sales in the country amid affordability concerns, the expiration of federal electric vehicle tax credits and supply chain issues, Ford and Tesla shares have managed to achieve double-digit percentage gains in the past month.
Tesla’s shares have likely been rising on the buzz surrounding Elon Musk’s SpaceX (in which Tesla also holds a stake), which is set to go public next month. Add to that, after years of regulatory delays, Tesla recently launched its Full Self-Driving (“FSD”) in China. This has also boosted investor confidence. Meanwhile, Ford’s rally reflects the optimism around the official launch of its Ford Energy business as part of a broader effort to diversify its business beyond vehicle sales. The company also secured a five-year battery storage supply deal with EDF Power Solutions North America.
While these factors would have driven the shares of Ford and Tesla higher lately, both companies are recalibrating their strategies amid a changing auto landscape. Let’s assess their challenges and growth drivers to see which stock has an edge now.
1-Month Price Comparison
Image Source: Zacks Investment Research
The Case for Ford
Ford continues to benefit from the relative strength of its traditional and commercial businesses, which remain the company’s primary earnings engines. It has raised its 2026 EBIT outlook for the Ford Blue division to $4.5-$5 billion, supported by improving operational execution and stable vehicle demand. At the same time, Ford Pro continues to emerge as one of the company’s most important long-term profit drivers. Beyond healthy commercial vehicle demand, the segment is increasingly benefiting from higher-margin software and service revenue streams. Ford expects Ford Pro to generate $6.5-$7.5 billion in EBIT this year.
The company is also positioning itself for future energy-related opportunities through Ford Energy, with the EDF agreement serving as an early validation of that strategy and potentially opening exposure to a large long-term market.
Additionally, Ford’s near-term cash flow profile appears to be improving despite a weak start to the year. The company reported nearly $2 billion in free cash flow burn in the first quarter of 2026, but management still expects full-year free cash flow of $5-$6 billion, up from $3.5 billion in 2025. Combined with Ford’s attractive dividend yield of 4%, that could strengthen the stock’s appeal for income-focused investors.
That said, the company’s EV business remains the biggest profitability challenge. The Model e division posted a $777 million EBIT loss in the last reported quarter, with margins staying deeply negative. Although losses improved from last year, Ford still expects the segment to lose $4-$4.5 billion in 2026 amid softer-than-expected EV demand. The company is also facing roughly $2 billion in commodity headwinds, partly tied to higher aluminum costs following disruptions at the Novelis plant.
Image Source: Zacks Investment Research
The Case for Tesla
Tesla may no longer enjoy the dominant EV positioning it once had, as rising competition and an aging vehicle lineup continue to pressure the brand. Still, there are signs that demand is stabilizing. Tesla exited the first quarter with its highest first-quarter order backlog in more than two years, while automotive gross margins improved sequentially. The company’s energy generation and storage business also remains a major bright spot. Although deployments declined both year over year and sequentially in the first quarter of 2026, management still expects full-year deployments to surpass 2025 levels. More importantly, the energy segment continues to rank among Tesla’s most profitable businesses.
But Tesla’s investment story has evolved far beyond EVs. Musk is increasingly positioning the company around artificial intelligence (AI), autonomous vehicles (AVs), and humanoid robots like Optimus. Investors are now betting heavily on those future growth opportunities rather than near-term vehicle sales.
However, that vision comes with rising execution and spending risks. Tesla recently increased its capital expenditure forecast to $25 billion from $20 billion as it accelerates investments in AI and autonomy infrastructure. While Musk argues the spending supports a much larger long-term opportunity, the payoff timeline remains uncertain and continues to shift. Tesla recently expanded robotaxi services to Dallas and Houston, but early user experiences have been mixed. Musk also acknowledged delays in the broader rollout timeline after earlier targets for expansion across multiple U.S. cities slipped.
Similar concerns surround Optimus, where production targets have already been missed and scaling is now expected to happen gradually. Meanwhile, Tesla’s FSD rollout in China signals the company’s effort to strengthen recurring software revenue streams but it faces stiff competition from Chinese EV makers like XPeng, BYD Co. Ltd. and Geely Automobile.
Image Source: Zacks Investment Research
Our Take: Ford Over Tesla
Despite Tesla’s stronger long-term innovation narrative, Ford currently looks like the more balanced investment choice.
Ford is benefiting from more tangible operational drivers. Ford Blue and Ford Pro continue to generate solid earnings, management has raised EBIT guidance for 2026, and the company expects its free cash flow to increase this year. Ford Energy may still be in its early stages, but the EDF partnership suggests management is actively building optionality beyond traditional vehicle sales. Investors are also getting a 4% dividend yield while waiting for the EV transition to improve.
Meanwhile, Tesla is becoming increasingly dependent on future promises tied to robotaxis, AI, and Optimus rather than near-term operating strength. The problem is that timelines keep shifting, spending continues to rise, and commercial scalability remains uncertain. Tesla may still win big over the long run, but the stock increasingly requires investors to pay upfront for businesses that are not yet fully proven.
At this stage, Ford—currently carrying a Zacks Rank #3 (Hold)— appears to offer a more balanced risk-reward profile, while Tesla—holding a Zacks Rank #4 (Sell) remains a higher-risk bet dependent on future execution.
View the Zacks #1 Rank List
Image: Bigstock
Ford vs. Tesla: Which Stock Looks Better After Strong 1-Month Gains?
Key Takeaways
Over the past month, shares of U.S. legacy automaker Ford (F - Free Report) and electric vehicle tech giant Tesla (TSLA - Free Report) have rallied more than 23% and 15%, respectively, outperforming the industry. Despite weakening vehicle sales in the country amid affordability concerns, the expiration of federal electric vehicle tax credits and supply chain issues, Ford and Tesla shares have managed to achieve double-digit percentage gains in the past month.
Tesla’s shares have likely been rising on the buzz surrounding Elon Musk’s SpaceX (in which Tesla also holds a stake), which is set to go public next month. Add to that, after years of regulatory delays, Tesla recently launched its Full Self-Driving (“FSD”) in China. This has also boosted investor confidence. Meanwhile, Ford’s rally reflects the optimism around the official launch of its Ford Energy business as part of a broader effort to diversify its business beyond vehicle sales. The company also secured a five-year battery storage supply deal with EDF Power Solutions North America.
While these factors would have driven the shares of Ford and Tesla higher lately, both companies are recalibrating their strategies amid a changing auto landscape. Let’s assess their challenges and growth drivers to see which stock has an edge now.
1-Month Price Comparison
The Case for Ford
Ford continues to benefit from the relative strength of its traditional and commercial businesses, which remain the company’s primary earnings engines. It has raised its 2026 EBIT outlook for the Ford Blue division to $4.5-$5 billion, supported by improving operational execution and stable vehicle demand. At the same time, Ford Pro continues to emerge as one of the company’s most important long-term profit drivers. Beyond healthy commercial vehicle demand, the segment is increasingly benefiting from higher-margin software and service revenue streams. Ford expects Ford Pro to generate $6.5-$7.5 billion in EBIT this year.
The company is also positioning itself for future energy-related opportunities through Ford Energy, with the EDF agreement serving as an early validation of that strategy and potentially opening exposure to a large long-term market.
Additionally, Ford’s near-term cash flow profile appears to be improving despite a weak start to the year. The company reported nearly $2 billion in free cash flow burn in the first quarter of 2026, but management still expects full-year free cash flow of $5-$6 billion, up from $3.5 billion in 2025. Combined with Ford’s attractive dividend yield of 4%, that could strengthen the stock’s appeal for income-focused investors.
That said, the company’s EV business remains the biggest profitability challenge. The Model e division posted a $777 million EBIT loss in the last reported quarter, with margins staying deeply negative. Although losses improved from last year, Ford still expects the segment to lose $4-$4.5 billion in 2026 amid softer-than-expected EV demand. The company is also facing roughly $2 billion in commodity headwinds, partly tied to higher aluminum costs following disruptions at the Novelis plant.
The Case for Tesla
Tesla may no longer enjoy the dominant EV positioning it once had, as rising competition and an aging vehicle lineup continue to pressure the brand. Still, there are signs that demand is stabilizing. Tesla exited the first quarter with its highest first-quarter order backlog in more than two years, while automotive gross margins improved sequentially. The company’s energy generation and storage business also remains a major bright spot. Although deployments declined both year over year and sequentially in the first quarter of 2026, management still expects full-year deployments to surpass 2025 levels. More importantly, the energy segment continues to rank among Tesla’s most profitable businesses.
But Tesla’s investment story has evolved far beyond EVs. Musk is increasingly positioning the company around artificial intelligence (AI), autonomous vehicles (AVs), and humanoid robots like Optimus. Investors are now betting heavily on those future growth opportunities rather than near-term vehicle sales.
However, that vision comes with rising execution and spending risks. Tesla recently increased its capital expenditure forecast to $25 billion from $20 billion as it accelerates investments in AI and autonomy infrastructure. While Musk argues the spending supports a much larger long-term opportunity, the payoff timeline remains uncertain and continues to shift. Tesla recently expanded robotaxi services to Dallas and Houston, but early user experiences have been mixed. Musk also acknowledged delays in the broader rollout timeline after earlier targets for expansion across multiple U.S. cities slipped.
Similar concerns surround Optimus, where production targets have already been missed and scaling is now expected to happen gradually. Meanwhile, Tesla’s FSD rollout in China signals the company’s effort to strengthen recurring software revenue streams but it faces stiff competition from Chinese EV makers like XPeng, BYD Co. Ltd. and Geely Automobile.
Our Take: Ford Over Tesla
Despite Tesla’s stronger long-term innovation narrative, Ford currently looks like the more balanced investment choice.
Ford is benefiting from more tangible operational drivers. Ford Blue and Ford Pro continue to generate solid earnings, management has raised EBIT guidance for 2026, and the company expects its free cash flow to increase this year. Ford Energy may still be in its early stages, but the EDF partnership suggests management is actively building optionality beyond traditional vehicle sales. Investors are also getting a 4% dividend yield while waiting for the EV transition to improve.
Meanwhile, Tesla is becoming increasingly dependent on future promises tied to robotaxis, AI, and Optimus rather than near-term operating strength. The problem is that timelines keep shifting, spending continues to rise, and commercial scalability remains uncertain. Tesla may still win big over the long run, but the stock increasingly requires investors to pay upfront for businesses that are not yet fully proven.
At this stage, Ford—currently carrying a Zacks Rank #3 (Hold)— appears to offer a more balanced risk-reward profile, while Tesla—holding a Zacks Rank #4 (Sell) remains a higher-risk bet dependent on future execution.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.