By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panelists generally agreed that Ferrari's high valuation (29.6x forward P/E) makes it vulnerable to multiple compression, while Ford's lower valuation (8.1x forward P/E) already prices in its structural headwinds. However, they disagreed on the relative merits of each company's prospects.
Risk: Ford's significant capex burden (~$50B cumulative through 2030) and Ferrari's exposure to luxury cyclicality and demand shocks in recessions.
Opportunity: Ford's potential margin improvement or shift to higher-margin EVs/commercial vehicles, and Ferrari's strong brand and pricing power.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Key Points
Ford dominates the market for pickup trucks and SUVs, but its shares are cheap for a reason.
Ferrari’s financial profile doesn’t resemble a typical car company, a nod to its incredible brand power.
The best stock to own has what it takes to generate a higher return over the next five years.
- 10 stocks we like better than Ferrari ›
This year hasn't been the best for Ford (NYSE: F) and Ferrari (NYSE: RACE). The Detroit auto stock has seen its share price tank 10% (as of March 18) in 2026. The Italian brand is in the same lane, as its shares are down 11%.
Shares in both businesses are currently trading well below their peak prices, so this should prompt opportunistic investors to take a closer look under the hood. Is Ford or Ferrari the better industrial stock to buy right now?
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Ford's leading position in trucks and SUVs doesn't mask its unfavorable fundamentals
Ford's F-Series pickups were once again the best-selling vehicles in America in 2025. This continued an incredible streak, now at 44 years, that they've held this position. Ford is a leader in the market for SUVs, as well. This is a good position to be in, since trucks and SUVs carry higher price tags and better margins.
However, this hasn't translated to a strong financial performance -- at least over the long term. Because Ford is a mass market auto manufacturer, its growth and profits are usually disappointing, compared to companies in other sectors.
For example, Ford's revenue is projected to increase at a compound annual rate of less than 1.8% over the next three years, according to analysts' consensus estimates. Also, its adjusted operating margin came in at 3.6% in 2025.
Without strong growth and profit gains, Ford doesn't have what it takes to generate winning returns for investors. That's true even though the stock's valuation is cheap, as it trades at a forward price-to-earnings ratio (P/E) of 8.1. Over the past decade, the shares have produced a disappointing total return of 50%.
Ferrari's superb financial performance is worth the premium price tag
During the last decade, Ferrari shares have climbed 674%, and right now, the luxury stock trades at a forward P/E of 29.6. That premium valuation might actually present an attractive entry point for prospective investors.
That's because Ferrari isn't a typical car company and caters to the wealthiest buyers. Therefore, demand is significantly less cyclical than the rest of the industry. Management doesn't try to sell as many vehicles as possible, focusing instead on scarcity and supporting the brand's value. This leads to incredible pricing power.
The financials reflect Ferrari's strategic priorities. Revenue increased 7% in 2025, despite shifting trade policies presenting a notable headwind. And in the past five years, the company's operating margin has averaged an unbelievable 27%.
Ferrari is clearly winning the race against Ford. It's an outstanding business due to its brand, pricing power, steady growth, and impressive profits.
Over the next five years and beyond, the Italian supercar company is poised to generate a higher return for shareholders. It's the better stock to buy over Ford.
Should you buy stock in Ferrari right now?
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ferrari. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"Ferrari's premium valuation assumes zero recession risk and perpetual demand from ultra-wealthy buyers—a bet that ignores cyclicality, not eliminates it."
The article presents a false choice. Yes, Ferrari's 27% operating margins and 7% revenue growth crush Ford's 3.6% margins and 1.8% CAGR—that math is real. But the valuation math cuts the other way: Ferrari trades at 29.6x forward P/E on a luxury cyclical business dependent on ultra-high-net-worth spending, which contracts sharply in recessions. Ford at 8.1x P/E, while unglamorous, prices in genuine structural headwinds (EV transition capex, legacy costs). The article ignores that Ferrari's scarcity model is precisely what makes it vulnerable to demand shocks—a 2008-style credit freeze would crater RACE far worse than F. Neither is compelling at current valuations.
Ferrari's brand moat and pricing power are genuinely durable; a 674% decade return reflects real competitive advantages that could justify 29.6x if the company sustains mid-to-high single-digit growth for another decade without margin compression.
"Ferrari's premium valuation is a significant risk factor that the article dismisses, as the stock is highly vulnerable to multiple compression if luxury consumption cools."
Comparing Ford and Ferrari is a category error; one is a cyclical industrial utility, the other a luxury goods play. While the article correctly identifies Ferrari's superior 27% operating margins and pricing power, it ignores the valuation risk inherent in a 29.6x forward P/E. Ferrari is essentially priced for perfection in an environment where even the ultra-wealthy may pull back on luxury discretionary spending if global interest rates remain 'higher for longer.' Conversely, Ford’s 8.1x forward multiple is a value trap if the EV transition continues to bleed cash. Investors aren't choosing between car companies; they are choosing between a low-growth dividend play and a high-multiple luxury brand susceptible to multiple compression.
Ferrari’s scarcity model and order backlog provide a defensive moat that makes it less susceptible to the cyclical downturns that typically crush Ford’s valuation multiples.
"Ford’s cheap valuation (forward P/E ~8.1) combined with truck/SUV dominance means modest margin recovery or better capital allocation could produce outsized returns versus Ferrari, whose premium already embeds most of its brand benefits."
I lean toward Ford (F) as the more compelling asymmetric bet despite the article siding with Ferrari. Ford’s F‑Series dominance (44 years) and SUV/truck exposure give it a durable cash-generating core, and at a forward P/E of ~8.1 and a 3.6% adjusted operating margin in 2025, even small margin improvement or modest revenue mix shift to higher‑margin EVs/commercial vehicles could meaningfully re-rate the stock. The market has punished cyclical risk; that creates optionality for investors willing to accept execution risk. Key catalysts: margin recovery, Ford Pro commercial electrification, and capital allocation (debt paydown/buybacks).
Ford could be a classic value trap — structural low margins, large EV capex, pension obligations, and cyclical exposure may prevent sustainable profit improvement. Conversely, Ferrari’s pricing power and 27% operating margins may already have priced in long-term upside, limiting Ford’s upside.
"Ford's cheap valuation and truck moat provide superior risk-adjusted upside versus Ferrari's premium pricing vulnerable to omitted macro headwinds."
Ford's unchallenged 44-year dominance in F-Series trucks and SUVs—vehicles with superior pricing and margins—anchors a defensive position in a segment slower to electrify than sedans, yet the article ignores this EV transition context where Ford leads with F-150 Lightning. At 8.1x forward P/E (versus historical averages), F offers a 4%+ dividend yield buffer against 1.8% CAGR revenue growth and 3.6% margins, implying re-rating potential to 10-12x if auto cycle turns. Ferrari's 29.6x P/E demands flawless execution amid glossed-over trade headwinds and luxury cyclicality risks.
Ford's mass-market model ensures persistent low margins and negligible growth, as evidenced by just 50% total returns over the past decade, while Ferrari's brand-driven 27% margins and 674% returns prove sustainable pricing power.
"Ford's valuation optionality ignores the structural capex drag that will suppress margins even if mix improves."
OpenAI flags Ford's optionality on margin re-rating, but nobody has quantified the capex burden. Ford's EV transition requires ~$50B cumulative capex through 2030—that's 8-10% of annual revenue annually. Even if F-150 Lightning mix improves margins 200bps, legacy pension obligations (~$60B liability) and competitive pricing pressure on EVs make 10-12x forward P/E a stretch. Ferrari's moat survives recessions precisely because ultra-wealthy demand is inelastic; Ford's margin recovery assumes cyclical tailwinds that may not materialize.
"Ford Pro’s high-margin commercial business is an overlooked structural hedge that justifies a higher valuation than the current 8.1x P/E suggests."
Anthropic is right to highlight the $50B capex burden, but both of you ignore the 'Ford Pro' segment. Ford Pro’s EBIT margins are significantly higher than the blended 3.6% average, acting as a structural hedge against legacy EV losses. While Ferrari relies on the whims of the 0.1%, Ford’s commercial dominance provides reliable, high-margin cash flow that is currently mispriced by the market’s fixation on the retail EV struggle.
"Ferrari's high valuation is vulnerable because luxury auto demand is not truly inelastic in severe downturns, and capex/regulatory and secondary-market risks can sharply compress multiples."
Anthropic overstates Ferrari’s recession resilience. Ultra‑wealthy demand is less elastic, but luxury autos face concentrated risks: order cancellations, dealer/collector pause in downturns, secondary‑market markdowns, and sentiment-driven pullbacks. Add electrification/regulatory-driven capex and constrained dealer inventory — any product misstep or timing miss can erode the scarcity premium. At ~30x forward P/E, modest revenue or margin slippage would trigger pronounced multiple compression; that downside tail is under-acknowledged.
"Ford faces analogous demand softness in trucks as Ferrari does in luxury orders, but its valuation embeds far more cyclical downside."
OpenAI rightly flags Ferrari's order cancellation risks, but overlooks Ford's parallel vulnerability: F-Series pre-orders and dealer lots are ballooning amid softening truck demand (U.S. pickup inventories up 20% YoY), amplifying pricing pressure at low 3.6% margins. At 8.1x P/E, Ford's cyclical beta is already heavily discounted versus RACE's 30x premium.
The panelists generally agreed that Ferrari's high valuation (29.6x forward P/E) makes it vulnerable to multiple compression, while Ford's lower valuation (8.1x forward P/E) already prices in its structural headwinds. However, they disagreed on the relative merits of each company's prospects.
Ford's potential margin improvement or shift to higher-margin EVs/commercial vehicles, and Ferrari's strong brand and pricing power.
Ford's significant capex burden (~$50B cumulative through 2030) and Ferrari's exposure to luxury cyclicality and demand shocks in recessions.