In a surprise to a lot of investors, General Motors (GM -0.56%) was one of the hottest auto stocks this week, rising as much as 11.8% before closing 11.4% higher for the week.

This wasn't a speculative move either. GM reported better-than-expected earnings for the fourth quarter and sees a strong year ahead in 2024.

GM's great quarter

GM reported a 0.3% decline in quarterly revenue to $43.0 billion while diluted earnings per share improved to $1.59, which both beat analyst estimates.

What really impressed investors was 2024 guidance for $8 billion to $10 billion in adjusted auto free cash flow and earnings of $8.50 to $9.50 per share. This is despite the higher costs associated with new union contracts in Q4.

At Cruise, GMs autonomous driving unit, the company said costs will come down $1 billion in 2024 as the company refocuses on launching in a single city before expanding further.

GM isn't in decline

Despite pulling back on some electric vehicle investments and launches, GM seems to be performing extremely well. The company is generating great cash flow and is now buying back debt at a rapid rate. The company spent $11.1 billion on buybacks in 2023, and management said they would continue buying back stock aggressively.

I think the decline of GM has been greatly exaggerated, and the company is on much better footing than the market thinks. People are still buying trucks and SUVs in large numbers, and GM is the leader in both markets. EVs may be the future, but trucks and SUVs are now, and that's good for GM's business.