On Wednesday, hertz global Holdings, Inc. (HTZ) saw its stock price soar by 56.44%, closing at $5.71 per share. In after-hours trading, Hertz shares surged by another 34%, hovering around $7.69 per share.

This dramatic increase came after Pershing Square Capital Management, led by prominent hedge fund manager Bill Ackman, disclosed a 4.1% stake in the rental-car company. According to a securities filing, Pershing Square acquired 12.7 million shares out of Hertz's 307.9 million outstanding shares, signaling strong investor confidence in the company's future despite its turbulent past.

A Rocky Road: Hertz's Recent History

Hertz has faced a challenging few years. The company emerged from bankruptcy in 2021 under new management, aiming to reinvent itself in a competitive market. One of its boldest moves was a massive investment in electric vehicles, ordering 100,000 Teslas and launching an advertising campaign featuring NFL star Tom brady to promote its environmentally friendly fleet. However, the strategy faltered as customer demand for EV rentals lagged, and the high maintenance costs of these vehicles drove up operating expenses.

The EV misstep led to a 47% decline in Hertz's stock price over the prior 12 months before the recent surge. To cut losses, Hertz sold a large portion of its EV fleet, incurring significant depreciation costs, including a nearly $200 million writedown. The company has reported net losses for the past couple of years, and its debt load has grown. Additionally, Hertz is grappling with a $272 million legal judgment from its bankruptcy, involving a dispute with bondholders over unpaid interest. The company is appealing this ruling to the Supreme Court, with its lawyers warning that the outcome could impact its solvency in future scenarios. To address these challenges, Hertz has engaged Ducera Partners as a financial adviser and Davis Polk as legal counsel.

Even with the stock surge, signs of financial strain persist. Hertz's junior bonds are trading at a discount of 50 to 60 cents on the dollar, and nearly half of its stock float is sold short, reflecting ongoing investor skepticism.

Beyond Rentals: Hertz Embraces Innovation

Despite its setbacks, Hertz is taking steps to innovate and improve its operations. On April 16, 2025, the company announced a partnership with UVeye, a leader in AI-driven vehicle inspection technology. Hertz will deploy UVeye's systems at its major U.S. airport locations, starting with Atlanta's Hartsfield-Jackson International Airport, with plans to expand by year-end.

UVeye's technology uses AI-powered cameras and machine learning to perform real-time automated inspections of a vehicle's body, tires, glass, and undercarriage. This replaces traditional manual inspections, which can be inconsistent and weather-dependent, with a faster, more accurate process. Mike Moore, Hertz's executive vice president of technical operations, emphasized the benefits: "We are excited to partner with UVeye to bring efficiency and greater accuracy to our maintenance process, so we can focus on our vehicles being ready when and where our customers want them."

UVeye's CEO, Amir Hever, hailed the collaboration as a new standard for the rental industry. The technology, already tested with Amazon delivery vans in 2024, promises to enhance vehicle availability and transparency for Hertz customers, potentially reducing costs and boosting service quality.

Hertz's stock surge marks a moment of optimism for the beleaguered company. However, its financial and legal challenges remain significant hurdles. The partnership with UVeye highlights Hertz's commitment to innovation, offering a glimpse of a potential recovery. As the company revamps its fleet and operations, its ability to balance past mistakes with forward-thinking strategies will determine whether this surge is a fleeting rally or the start of a sustainable comeback.