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GM Stock Dips Despite Unveiling New Cadillac Escalade SUV

It’s another ugly day for growth stocks across the board. Investors in a range of companies with strong growth prospects are being sold off as investors try to come to agreement on what the proper multiples they’re willing to pay for such companies are. For investors in General Motors (NYSE:GM), this appears to be the case today. Currently, GM stock is down more than 2%, outpacing the market’s losses, in early afternoon trading.

General Motors (GM) headquarters building with blue GM logo
Source: Linda Parton / Shutterstock.com

Although a traditional automaker, GM has begun to be lumped into the larger bucket of electric vehicle (EV) stocks due to the company’s aggressive growth targets on this front. That said, this company is still primarily a large-scale producer of internal combustion engine (ICE) vehicles, which generate the vast majority of GM’s cash flow.

In this red-hot auto market, companies like GM have seen outsized interest from investors. These producers have newfound pricing power and the potential for margin improvement. Such a scenario hasn’t played out very much in recent decades, making GM stock an interesting option for growth investors. Add in the EV component, and some investors have reason to be excited about his company’s prospects.

That said, there’s another catalyst investors are watching with respect to General Motors. Let’s dive into what investors are watching.

GM Stock Drops, Despite Key Catalyst

A number of reports today highlighting the impressive performance of GM’s new Cadillac Escalade-V provide an interesting investment thesis to consider. Critics seem to like this high-performance luxury SUV. Indeed, from a performance and features standpoint, it certainly checks a lot of boxes. At least, for those who favor the Escalade model.

However, these reports also point out that rival Ford (NYSE:F) will not release its high-performance Lincoln Navigator in response to GM’s offering. For those looking at GM stock, this could be a big deal. The competitive landscape is important for how investors view particular auto stocks. Accordingly, with GM’s Cadillac Escalade expected to pick up significant market share, there’s a catalyst on the horizon for bulls to get excited about.

Many investors generally aren’t excited about much right now. This macro environment is bearish, and valuations are being compressed. However, for those looking for a reason to buy GM stock, aside from today’s 2% dip, there’s another catalyst on the horizon.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.


Article printed from InvestorPlace Media, https://investorplace.com/2022/05/gm-stock-dips-despite-unveiling-new-cadillac-escalade-suv/.

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