Ford’s Surprising AI Pivot Sends Ford Stock (NYSE:F) Slipping

Legacy automaker Ford F -0.04% ▼ discovered, not so long ago, that the market for electric vehicles (EVs) was not what it thought it would be. So Ford worked to pivot. While Ford was not getting out of the market altogether, it was adjusting its position therein. It was also looking to take some of what it learned from the electric vehicle market and apply it elsewhere. The “elsewhere” in question is the artificial intelligence (AI) market. The idea that Ford was getting into AI left some investors concerned, and share prices slipped fractionally in Monday afternoon’s trading.

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Ford is not suddenly going to start a large-scale programming initiative, though it does have some programmers under its umbrella. Instead, Ford is moving to serve as part of AI’s infrastructure. More specifically, Ford is looking to offer power supply services, using some of its electric battery capability to put wattage behind AI operations.

Ford will still have a hand in the EV market. It is working on a direct competitor to Tesla’s TSLA -2.17% ▼ Model 3 and Model Y cars, which are still part of Tesla’s lineup after the Model S and Model X got decommissioned. But Ford will also put its battery facilities—part of the electric vehicle production line—to work as energy storage options to keep data centers running during power outages or when systems require more energy than the grid can supply.

The Customer is Always Right…

A Ford mechanic recently had an unexpected problem as a customer wanted him to install a starter in a Ford vehicle. This would normally not be much of an issue except for one key point: there was nothing wrong with the vehicle’s starter in the first place.

The starter the customer wanted replaced had an auto-stop system built into it, which called for it to shut down the car at red lights. This is a fuel-saving move, designed to eliminate fuel waste due to idling at a red light or in a similar condition. This explanation did not satisfy the customer, though, and the mechanic carried on with the process, knowing the problem would likely remain.

Is Ford Stock a Good Buy Right Now?

Turning to Wall Street, analysts have a Hold consensus rating on F stock based on three Buys, 11 Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 25.54% rally in its share price over the past year, the average F price target of $13.88 per share implies 20.12% upside potential.

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