XPO Stock Soars, but the ‘Freight Recession’ Isn’t Over. AI Is Helping.

Coming into Thursday trading, XPO stock was down about 5% this year. (Dreamstime)

Key Points

• XPO reported third-quarter adjusted earnings per share of $1.07 on sales of $2.1 billion, exceeding Wall Street expectations.
• North American less-than-truckload business increased by 0.3% to $1.3 billion, an improvement from a 2.5% decline in the prior quarter.
• XPO improved profit margins by almost two percentage points year over year, partly due to AI-driven route planning and driver prediction.

Logistics is the lifeblood of the economy, moving goods on the roads, rails, and waters. That’s why it’s a good idea for investors to check in on the health of shippers.

Freight hauler XPO reported better-than-expected third-quarter earnings on Thursday. Things aren’t great, but there is some optimism.

XPO announced adjusted earnings per share of $1.07, up a nickel year over year. Sales were $2.1 billion, up 2.8% compared with the third quarter of 2024.

Wall Street was looking for EPS of $1.02 from sales of $2 billion.

Shares added 9%, closing at $135.97 .The S&P 500 and Dow Jones Industrial Average dropped 1% and 0.2%, respectively.

Coming into Thursday trading, XPO stock was down about 5% this year. Weak freight markets have weighed on investor sentiment.

While the three-year-old “freight recession” isn’t over yet, says CEO Maro Harik, he detects some optimism with XPO customers heading into 2026, citing falling interest rates.

Quarterly results also showed some green shoots. XPO’s North American less-than-truckload business was $1.3 billion in the quarter, up 0.3%. That’s an improvement from a 2.5% decline in the second quarter.

Less-than-truckload, or LTL, business can be a gauge of the industrial economy. LTL is typically for shorter-haul lengths than for truckload operators driving across the country, with LTL serving customers who don’t need to use the full trailer.

Despite weakness, XPO improved profit margins by almost two percentage points year over year. Harik pointed out that AI is helping. XPO uses advanced technology to plan routes and predict where drivers will be needed, among other things. The result is lower time spent with trucks empty, generating no sales.

XPO is trying to control what it can control while waiting for freight markets to turn.

Write to Al Root at allen.root@dowjones.com