By Mike Colias

After years of shunning the U.S.'s two largest car companies, investors are finally starting to kick the tires on General Motors Co. and Ford Motor Co.

Ford shares have surged about 20% this week and have risen about 35% in January, which would mark their best month since April 2009. The move this week followed a Deutsche Bank report suggesting Ford could give a brighter-than-expected profit outlook for 2021 when it reports fourth-quarter earnings on Feb. 4.

GM's stock price also has jumped about 35% this month, to a record level since shares began trading in 2010, following the auto giant's bankruptcy a year earlier. The jump has come amid enthusiasm over GM's electric-vehicle plans and Microsoft Corp.'s investment this week in Cruise, GM's majority-owned autonomous-car division.

Investors have come to expect double-digit stock moves from Tesla Inc. and a bevy of electric-vehicle startups that have gone public over the last year. But until lately, Detroit's auto makers haven't benefited much from Wall Street's fixation with electric and driverless cars.

The stock performance of both GM and Ford has trailed that of the S&P 500 index in each of the last four years, despite periods of record profit for each company.

Meanwhile, Tesla shares rose more than eightfold in 2020 alone, helping to spark an influx of money into electric-vehicle stocks that have propelled valuations of some revenue-less companies beyond that of Ford and other global car makers.

Investors have been drawn to pure-play electric-vehicle companies and battery makers because of their heady growth prospects, analysts say. Electric cars accounted for about 3% of global vehicle sales in 2020, according to Bernstein Research, and analysts expect that share to grow while sales of gasoline- and diesel-powered vehicles decline.

But investors have tended to discount legacy auto makers -- despite deep engineering expertise and billions of dollars in electric-vehicle investment -- viewing them as stuck in a cyclical and capital-intensive industry that has historically produced single-digit profit margins.

The recent moves point to fresh investor interest in the technology bets GM and Ford are making, analysts say.

Investor enthusiasm over electric vehicles is expected to last well into this year, boosted by President Biden's support for electric charging stations and other proposals to speed the adoption of plug-in cars, Barclays analyst Brian Johnson said in a research note last month.

Investors last week cheered the formation of a new GM business unit to sell electric vans and services to commercial-delivery companies, including FedEx Corp. Barclays' Mr. Johnson said the business, called BrightDrop, has the potential to disrupt the market for commercial vehicles and delivery logistics.

Several analysts have said Ford's electric-vehicle plans are behind those of GM, which in November said it would boost spending on electric vehicles by about one-third, to $27 billion through mid-decade. That is far greater than the spending Ford has outlined, though analysts expect the company to disclose updated investment plans this spring.

Still, Ford's shares have gotten a lift following recently disclosed plans for its own electric cargo van and a plug-in version of the F-150 pickup truck, its biggest moneymaker. It recently began selling its first U.S. electric model in many years, the Mustang Mach-E sport-utility vehicle, which has drawn praise from car reviewers.

Ford also benefited from the electric-vehicle rally as a shareholder in startup Rivian Automotive LLC, which this week raised $2.65 billion, at a valuation of $27.6 billion. Ford invested $500 million in Rivian in spring 2019.

Write to Mike Colias at Mike.Colias@wsj.com

(END) Dow Jones Newswires

01-21-21 1506ET