UBS Says GM’s Best Business Is Not Cars. It Is the Subscription Inside Them.

UBS has reiterated its Buy rating on General Motors and raised its price target to $114 against a share price of about $87, an implied upside of roughly 31%. Analyst Joseph Spak’s argument is that the market still values GM as a cyclical manufacturer when a growing share of its earnings comes from software: Super Cruise, the hands-free driving subscription, and in-vehicle assistant services. UBS models total digital revenue reaching $9.6 billion by 2036, roughly triple the current level. The note landed on a day when the wider market fell, with chip and AI infrastructure shares selling off after prominent figures in the industry called for development to slow.

The case is about the quality of the revenue rather than its size. Subscription income recurs, is less cyclical than truck sales and carries a higher margin, so on Spak’s reasoning it deserves a richer multiple than the metal-bending business it sits inside. There is a second effect that is easy to miss: once a vehicle is connected, GM can earn from it long after it leaves the forecourt, including from the second owner. Spak suggests that simply reporting digital revenue and profit as a separate line could prompt a re-rating on its own, without anything changing in the business.

The scepticism is straightforward. A forecast that reaches to 2036 is a long way from a delivered result, and the take-up rate for driver-assistance subscriptions across the industry has been mixed, with several manufacturers quietly retreating from paid feature unlocks after customers objected. GM shares are higher for the year but have trailed the broader market, which suggests investors have heard the software story before. Of the 29 analysts covering the stock, 22 already rate it a Buy or Strong Buy, so the optimistic view is the consensus rather than a contrarian one.

The practical test is disclosure. If GM begins reporting digital revenue, subscriber numbers and retention separately, the market can value that stream properly; until then, the claim is unverifiable from the outside. Watch the next results for any breakout of Super Cruise subscribers and renewal rates, and watch whether attach rates hold once the free trial periods on recent model years expire.