GM's connected services could boost profits, with $7.5B deferred revenue expected by 2026.

General Motors is transforming its business model by focusing on connected services like OnStar and SuperCruise, which have high profit margins of around 70%. These services are projected to generate $7.5 billion in deferred revenue by fiscal year 2026, signaling a shift toward recurring revenue streams beyond traditional car sales. A valuation analysis suggests GM's stock could rise by about 31.7% from its current market capitalization, driven by the undervalued growth potential of its connectivity segment. This shift could make the connected services revenue surpass GM's wholesale automotive revenue in the near future, supporting a bullish outlook on the company.