GM Posts Largest Gain Since the Pandemic: Shares Still Look Cheap

Key Points

• GM just saw its largest single-day gain in over five years, driven by its Q3 2025 results.
• The company smashed estimates, increased its market share, and demonstrated strong cost management.
• Further upside looks to be well in play, with GM still trading at an inexpensive valuation compared to many automakers.

Shares of Detroit Three automaker General Motors NYSE: GM have been underwater for most of 2025, with tariffs, EV difficulties, and economic uncertainty depressing sentiment. However, things just swung massively in the right direction. GM’s Q3 2025 earnings were arguably the company's biggest positive surprise recently.

On Oct. 21, GM shares rose 15%, the biggest single-day gain in 2025 and the second-largest since 2010 restructuring. This historic surge stands out long-term. The only day that topped it was March 24, 2020, when markets rebounded from the COVID-19 crash. GM rose 20% that day, while the S&P 500 rose 9%.

Below, we’ll dive into the results that caused GM shares to have a historically good day. Additionally, we’ll detail why GM’s shares still have significant upside potential. Even after spiking, GM’s valuation remains depressed compared to auto peers, and its outlook is improving.

GM Crushes Estimates on the Top and Bottom Lines

GM posted revenue of approximately $48.6 billion, a 0.3% drop from the prior year’s quarter, crushing Wall Street’s highly pessimistic forecasts. GM’s sales came in $4 billion higher than expected, as analysts predicted revenue would fall by around 8.5%. The company also posted a resounding win on adjusted earnings per share (EPS), which came in at $2.80.

This was a 5% decline, but walloped Wall Street’s $2.32 forecast by 48 cents. Overall, the company’s EPS decline was a fraction of the 22% drop Wall Street anticipated.

The company also stated that its solid outperformance is expected to continue, leading to an upward revision in its full-year guidance across multiple metrics. Notably, adjusted EPS was raised by $1 at the midpoint, now reaching approximately $10.13. GM also anticipates generating $1.25 billion more in operating income and $1.75 billion more in adjusted automotive free cash flow than previously forecasted.

GM Boosts Auto Market Share, Reduces Tariff Impact Forecast

GM led the U.S. auto market in Q3 with 710,000 deliveries, topping all rivals while offering fewer incentives than the industry average. This helped the company achieve its highest Q3 U.S. market share since 2017 of 17%. The company also recorded record EV sales of 67,000, which is the second highest in the United States, only behind Tesla NASDAQ: TSLA.

The ending of EV tax credits in September boosted this number, as consumers rushed to buy. Still, GM leads the industry in EV market share growth in 2025, demonstrating its strength in this area. Notably, GM also reduced its tariff impact guidance 2025 by $500 million at the midpoint, showing its ability to mitigate external pressures. Lastly, GM returned huge capital to investors, spending $1.5 billion on buybacks. Overall, GM’s results gave investors little to dislike.

GM: Resilient Demand, Effective Management, and Low Valuation Are a Recipe for Success

These results show that GM is winning on two vital fronts: demand and costs. Despite tariffs and a much less confident consumer, it generated essentially the same revenues as last year. The University of Michigan Consumer Sentiment Index has declined by more than 20% from September 2024 to September 2025. This shows that GM buyers hold firm amid considerable headwinds, a very positive sign for the company’s future.

Additionally, GM is managing higher costs well, as indicated by its EPS beat and the reduction in tariff guidance. Management shows it can adapt effectively to difficult circumstances, another highly positive sign. When conditions improve, the company should be able to perform even better. Notably, GM believes 2026 will be stronger than 2025 as it puts in more work to reduce EV losses and mitigate tariffs.

Even after spiking, GM trades at a forward price-to-earnings (P/E) multiple of just 6.6x. That is well below the industry median, around 10x to 11x. It pales compared to Tesla’s 227x forward P/E and is still well below Ford Motor’s NYSE: F 9x figure. GM looks like a strong value player, with the company’s outlook improving significantly, and its valuation is still cheap. Analysts at Wedbush seem to agree. Following the results, they raised their GM price target to $75, suggesting roughly 13% more upside compared to the Oct. 21 close.