General Motors (GM) stock rose approximately 5% on Monday, driven by two key catalysts: the launch of supervised public road testing for its new automated driving system and a bullish research note from Bank of America.
The automaker announced it has begun testing its advanced automated driving system on public highways in California and Michigan. This marks a significant step from controlled development into live traffic. More than 200 development vehicles, each with trained safety drivers ready to take over, will be deployed. The system's AI model is backed by over one million miles of real-world data collected across 34 states.
Simultaneously, Bank of America issued a positive note following GM's presentation at the Bank of America Global Automotive Summit. The firm highlighted GM's strategic pivot towards recurring digital revenue, which it described as a "tech-like" transformation. A central figure in this shift is the OnStar ecosystem. GM's CFO, Paul Jacobson, revealed the company expects its deferred revenue backlog from software and digital services to reach $7.5 billion by the end of 2026.
Further bolstering the digital revenue strategy, GM announced it will "unbundle" its Super Cruise autonomous driving technology, offering it as a standalone option for 2027 model year trucks. BofA analysts believe this move will accelerate adoption and digital revenue through the remainder of the year.
The bullish sentiment is also rooted in GM's core truck business. The high-margin GMC Sierra and Chevrolet Silverado models generate about $17,500 per unit, nearly double the corporate average. BofA noted that the rollback of strict emissions standards under the Trump administration allows GM to focus on these profitable internal combustion engine (ICE) trucks and SUVs as electric vehicle (EV) demand cools.
Supporting the stock price are strong capital return programs. GM has a $6.0 billion share buyback program and authorized a 20% dividend increase earlier this year, signaling management's confidence in its cash flow. The stock also offers a 0.95% dividend yield.
Monday's rally pushed GM shares back above their 200-day moving average, a technical milestone watched by traders. Despite the gain, the stock remains down about 13% year-to-date. Wall Street's consensus rating on GM is "Moderate Buy," with an average price target of $95.76, suggesting over 25% upside from current levels near $76.
Looking ahead, GM's longer-term autonomous plans include an eyes-off driving system for the all-electric Cadillac Escalade IQ, targeted for a 2028 launch on highways before expanding to full driveway-to-driveway capability.
