General Motors Co (GM) and Cruise, in which the auto maker holds a majority stake, announced on Tuesday a partnership with Microsoft Corp, aimed to commercialize self-driving vehicles.
General Motors shares closed higher for the eighth time in the past ten trading sessions in New York on Tuesday. It has also been the sharpest single-session gain since March 24th 2020. The stock went up 9.75% ($4.87) to $54.84, after touching an intraday high at $55.13 and also a fresh all-time high.
Shares of General Motors Company have risen 31.70% so far in 2021 compared with a 1.14% gain for the benchmark index, S&P 500 (SPX).
In 2020, General Motors’ stock went up 13.77%, thus, it underperformed the S&P 500, which registered a 16.26% gain.
Microsoft Corp, along with General Motors, Honda Motor Co and institutional investors, will take part in a combined new equity investment of over $2 billion in Cruise. This way the post-money valuation of the self-driving vehicle maker is expected to reach $30 billion.
Cruise’s self-driving vehicles will take advantage of Microsoft’s Azure cloud computing platform, the companies said.
“As Cruise and GM’s preferred cloud, we will apply the power of Azure to help them scale and make autonomous transportation mainstream,” Microsoft Corp’s Chief Executive Officer Satya Nadella said in a statement, cited by Reuters.
Analyst stock price forecast and recommendation
According to CNN Money, the 16 analysts, offering 12-month forecasts regarding General Motors Company’s stock price, have a median target of $52.00, with a high estimate of $72.00 and a low estimate of $40.00. The median estimate represents a 5.18% downside compared to the closing price of $54.84 on January 19th.
The same media also reported that at least 15 out of 18 surveyed investment analysts had rated General Motors Company’s stock as “Buy”, while 2 – as “Hold”.