Ford jumps as potential seen for deals to power AI data centers

Morgan Stanley believes Ford’s relationship with China’s Contemporary Amperex Technology Co. Limited, or CATL, represents an underappreciated strategic advantage for its Energy Storage business. The firm says this relationship positions Ford to become a key supplier of compliant energy storage systems to utility and data center customers in the U.S. Shares of the automaker have jumped about 14% on Wednesday afternoon following the firm’s note.

OVERLOOKED OPPORTUNITY: Late last year, Ford announced its entry into the energy storage market, and Morgan Stanley argues that investors are overlooking the scale of this opportunity and its potential to improve profitability within Ford’s Model e segment.

The firm also believes Ford’s licensing agreement with CATL is a key competitive differentiator that the market has not fully appreciated. Morgan Stanley sees a meaningful likelihood that Ford signs an energy storage system supply agreement with large commercial customers, and potentially cloud hyperscalers, in the coming months.

NEW BUSINESS, RIGHT TECHNOLOGY: Energy storage is a new business for Ford, but Morgan Stanley believes the company has the right technology. Ford’s decision to invest $2B into a new Energy Storage business was met with skepticism, which the firm views as understandable given it was announced alongside a $20B write down in Ford’s electric vehicle operations. However, Morgan Stanley highlights one clear point of differentiation: Ford is licensing technology from CATL, the leading global manufacturer of energy storage systems.

With an increasingly complex geopolitical environment – including tariffs and evolving regulations around foreign entities – the firm sees Ford’s structure as an opportunity to deploy capital into a strategic growth area while maintaining operational control and regulatory alignment.

PRICE ACTION: In afternoon trading, shares of Ford have jumped about 14% to $13.63.