Tesla investors always argue the EV maker isn't a car company. It's a technology company that just happens to make cars to sell its AI ambitions. Well, General Motors isn't a car company either. It's a stock buyback machine. Wall Street -- and investors -- are finally figuring that out.

Shares of the auto maker jumped almost 5% on Tuesday after it reported better-than-expected second-quarter numbers. Earnings per share came in at $3.57. Analysts were looking for $3.19, according to FactSet.

Those strong earnings came despite a moribund car market. To be sure, truck sales are solid, but there isn't much industry growth expected this year.

GM, however, keeps generating cash from a stable business and uses that cash to buy back stock.

As of July 10, the company had about 877 million shares outstanding -- down from 952 million a year ago. In the past 12 months, according to FactSet, it has spent more than $4 billion retiring stock -- about a third of total free cash flow generated over that span.

If GM used all its projected free cash flow for buybacks, it could retire 85% of its shares in a decade and effectively go private in 15 years. That implies share price growth of 20%. Our math assumes the company's total market value stays static.

Wall Street clearly sees value increasing. After earnings, the average analyst price target is up about $3 to $101. That's up from about $56 a share a year ago.

Investors have been a little slower to realize all that is going on, but GM stock was moving higher on Wednesday -- up 4.6% at $83.18. The S&P 500 was up 0.2%.

And Wall Street was helping, spreading around nice words and sprinkling in a higher price target.

TD Cowen analyst Itay Michaeli reiterated the stock was a top pick. J.P. Morgan analyst Rajat Gupta said execution remained consistent.

Goldman Sachs analyst Mark Delaney reflected that dealer inventories are healthy, which is good for free cash flow generation potential down the road. (Dealers won't stop buying vehicles.)

And RBC analyst Tom Narayan raised his price target by $6, to $100, noting that GM has business opportunities in defense and autonomous driving.

All the love from Wall Street doesn't do much good if investors don't embrace it. And if they don't, GM will just keep buying more stock at a discount.

Tesla, for its part, doesn't buy stock back. It isn't expected to generate positive free cash flow in 2026. It's spending some $25 billion on new plants and equipment to fund its AI ambitions. That spending has yielded its own benefits: Tesla stock trades for about 166 times earnings expected over the coming 12 months. GM trades for less than 6 times.

Write to Al Root at allen.root@dowjones.com

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July 22, 2026 12:40 ET (16:40 GMT)

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