Key Points
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Over the past decade, Ferrari stock’s 742% gain trounces Ford’s 84% total return (which includes dividends).
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A well-funded and highly ambitious entrepreneur has a significantly better chance at copying Ford’s business model from scratch than replicating Ferrari.
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Investors will notice that earnings growth is a major driver of stock performance over time.
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In the world of brand status, Ferrari (NYSE: RACE) is in an elite category. This statement holds up regardless of industry. Consumers around the globe aspire to own its luxury vehicles.
Ford Motor Company (NYSE: F), on the other hand, caters to a mass market audience. The Detroit car manufacturer, founded in 1903, has been a leader in unit sales. It has a strong position in SUVs and pickup trucks.
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Over the next 10 years (and beyond), though, I predict that Ferrari will be a much more promising investment candidate than Ford. Besides looking at their historical track records, investors should consider other critical factors such as moats and profit growth. The better automotive stock is apparent.
History doesn't lie
While past performance is no indication of what the future holds, the wisest investors don't ignore track records. History doesn't lie.
Ford has put up a disappointing performance. In the past decade, its share price has increased by only 8% (as of Sept. 22). However, including dividends, the total return over that period is 84%, which is much better.
But this doesn't hold a candle to Ferrari's impressive showing. The Italian company's shares have climbed 742% over the last 10 years. Had you invested $10,000 in the stock in late September 2016, you'd have more than $84,000 today. This gain not only outpaces Ford's, but it's also much better than the S&P 500 index's total return.
Differentiation creates lasting value
If some highly ambitious entrepreneur had access to unlimited capital, design and engineering talent, raw materials, and regulatory compliance, I'd argue that it would be much easier to replicate Ford's business model from a standing start. Money would pour into research and development efforts, expanding manufacturing, developing a smooth supply chain, and sales and marketing to get a brand-new car on the market.
This isn't to say success is certain. However, Ford's lack of durable competitive strengths exposes it to the constant threat from industry rivals and new market entrants introducing vehicles that capture demand.
It would be almost impossible for that same entrepreneur to copy what Ferrari does. A rich racing heritage and first-class design and technical capabilities support the company's success. Because of these variables, Ferrari is viewed by consumers as an aspirational good or a collector's item more than a tool to get from point A to point B.
Ferrari has pricing power, something Ford doesn't possess. This is an obvious sign that the former has developed an economic moat. Ferrari intentionally caps the supply of cars that it produces and ships. Management's priority is to maintain the strength of the brand.
This is evidenced by the company's first fully electric vehicle, called the Luce, revealed in May. Initial reactions were of disappointment, raising questions about whether Ferrari had lost its edge. At a charity auction in August, though, an exclusive model of the Luce sold for $40 million. Demand is robust for anything this business makes.
Earnings growth is the driver
If you buy Ford today over Ferrari with the plan to hold the stock for 10 years, then you're likely making a bet that the Detroit carmaker will register faster profit gains. Since fundamental performance drives the stock in the long run, this is the assumption you're making.
Again, we can turn to history for valuable context. From the second quarter of 2016 to the most recent quarter (Q2 2026 ended June 30), Ford's net income went from just under $2 billion to $1.3 billion. This translates to a cumulative loss of 33%. That's nothing to be pleased about.
During that same 10-year stretch, Ferrari's net income soared 377%, boosted by steadily rising sales figures and exceptional margins. And that's precisely why the stock has performed significantly better than Ford. I expect this trend to continue.
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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.