To The Moon

$General Motors(GM)$ delivered a stronger second quarter than the headline decline in net income initially suggests.

The automaker generated approximately $48.0 billion in revenue, an increase of about $900 million year over year, and adjusted EBIT of roughly $3.9 billion. Adjusted diluted earnings reached $3.57 per share. GM also raised its 2026 adjusted earnings forecast to $12–$14 per share. The company released these results before trading opened on July 21. GM’s second-quarter release and earnings presentation provide the underlying figures.

GM Q2 2026 slides: strong results drive second guidance raise By Investing.com

GM’s pricing discipline was arguably more important than the earnings beat. Incentives averaged 4.7% of vehicle sticker prices, approximately 1.6 percentage points below the industry average. That suggests GM did not have to sacrifice pricing aggressively to protect North American sales.

The company’s profitable internal-combustion and truck businesses remain the bullish foundation. They continue to finance investment in electric vehicles, batteries, software and autonomous-driving technology while supporting shareholder distributions. Higher guidance indicates management believes this core profitability can persist through the remainder of 2026.

Nevertheless, several weaknesses complicate the outlook.

Global vehicle deliveries fell approximately 7.2%, marking a third consecutive quarterly decline, while North American deliveries decreased about 3.4%. Revenue growth alongside falling unit sales implies that price and vehicle mix—not rising underlying volume—carried the quarter. That can work while demand for high-margin trucks and SUVs remains resilient, but it is less durable than broad-based volume growth.

GAAP net income fell approximately 31% to $1.31 billion, partly because GM recorded a $1.9 billion restructuring charge associated with its EV operations. This reinforces the central concern: the legacy business is performing well, but GM is still paying heavily to adjust its electric-vehicle capacity and strategy.

Management must balance two risks. Moving too slowly in EVs could leave GM behind if adoption accelerates; investing too aggressively could destroy capital if consumers continue choosing hybrids and combustion vehicles. The company also faces elevated input costs, trade-policy uncertainty and potential consumer pressure from higher interest rates and fuel prices.

GM Weekly Chart

The stock advanced about 4.9% on July 21 and closed near $79.50 after reaching roughly $80.08. It finished near the top of a wide daily range, a constructive reaction indicating that investors retained most of the earnings-driven gain. The $80 region is now an immediate technical test because it capped the session. A sustained move above it would strengthen the bullish price structure; a fast reversal into the pre-earnings range would imply that the earnings gap lacked durable demand.

In my technical analysis view, GM has rebounded from the 0.382 Fibonacci retracement near $76 and is now testing the 0.618 level around $79.69; a decisive weekly close above this resistance, ideally followed by continued volume or a successful retest, would confirm a breakout and expose the prior high near $85.41, followed by the 1.272 and 1.618 Fibonacci extension targets around $89.49 and $94.67. The technical picture is also supported by GM’s latest earnings, with the company raising its 2026 outlook after stronger profits and resilient demand for higher-margin trucks and SUVs. A defined-risk way to capture the move would be an October 2026 $80/$90 call debit spread, entered only after the weekly breakout is confirmed; this reduces premium cost and post-earnings volatility exposure compared with buying a naked call, while targeting the first extension zone. A wider $80/$95 spread would provide more upside participation toward $94.67 but cost more. The bullish thesis would weaken if GM closes back below approximately $77.80, and especially if it loses the $76 support region, suggesting the breakout has become a bull trap.

The evidence leans moderately bullish because GM is preserving pricing, producing strong adjusted earnings and raising guidance. The view is tempered by declining deliveries and costly EV restructuring. It would be invalidated by weakening North American pricing, continued volume contraction or additional EV charges that prevent adjusted profits from translating into stronger GAAP earnings and cash flow. This is personal opinion for education and is not financial advice.

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Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The views expressed are personal opinions based on publicly available information and are subject to change without notice. Investors should conduct their own research and consider their financial situation, risk tolerance, and investment objectives before making any investment decisions. I do not guarantee the accuracy or completeness of the information presented.