Výrobce elektromobilů Tesla podle deníku The Wall Street Journal zvažuje oddělení svých aktivit v Číně před případným spojením se společností SpaceX. Mezi diskutované varianty patří vyčlenění čínského podnikání do samostatné firmy, jeho prodej nebo uzavření. Konečné rozhodnutí zatím nepadlo a plán se může změnit.
Hlavním důvodem jsou geopolitické obavy a možné regulatorní komplikace spojené s působením SpaceX jako významného dodavatele americké vlády a obranného sektoru. Tržby od americké vlády tvořily v roce 2025 přibližně 20,9 % tržeb SpaceX. Oddělení čínské divize by mělo vytvořit bariéru mezi aktivitami Tesly v Číně a obranným byznysem SpaceX.
Čína je pro Teslu druhým největším trhem a v první polovině roku 2026 tvořila přibližně 18 % jejích tržeb. Automobilka v Šanghaji vyrábí elektromobily a baterie pro čínský trh i export. Případná separace by mohla mít významný dopad na Teslu a v případě spojení se SpaceX také na její ocenění.
Akcie Tesla a SpaceX Akcie Tesly (TSLA) v předburzovní fázi posilují o 2,1 % na 315,4 USD, zatímco akcie SpaceX (SPCX) rostou o 1,4 % na 113,8 USD.
Zdroj: The Wall Street Journal
Marek Krejčiřík
Fio banka, a.s.
Prohlášení
Související odkazy Index S&P 500 na začátku obchodování oslabuje, akcie Alphabet po výsledcích klesají o 6,3 % Tesla zveřejnila výsledky za 2Q, zisk na akcii zaostal za odhady Wall Street otevírá po reportu z trhu práce v zeleném Americké akciové indexy rostou po dohodě mezi USA a Íránem Americké indexy zahajují seanci v zeleném
Tesla stock rose by over 3.5% on Thursday and continued those gains in the extended hours after details of the potential merger with SpaceX emerged. TSLA hit a high of $315, up modestly from this week’s low of $296. Still, the question is whether a Tesla and SpaceX merger would be a good deal in the first place.
A report by the WSJ notes that Elon Musk has requested advisors for advice on the way forward as he plans to combine Tesla and SpaceX.
One of the strategies to make the deal possible is for Tesla to give up its Chinese business. The company may decide to sell it, spin it off into a separate firm, or at the extreme, close it.
Separating the Chinese business would be important because SpaceX counts the US government as the biggest market. As such, the two governments would likely reject such a merger.
A Tesla-SpaceX merger would be the biggest one ever because of their sizes. Tesla is now valued at over $1.2 trillion, while SpaceX has a market capitalization of over $1.4 trillion.
Yahoo Finance data estimates that Tesla’s revenue will be $105 billion this year, followed by $120 billion next year. SpaceX, on the other, is expected to make over $39 billion this year and $73 billion next year.
Elon Musk has been working to consolidate his operations in the past few years. He merged X with xAI last year, creating a company in the social media and artificial intelligence industry.
After that, he merged xAI with SpaceX, creating a company with a presence in the space, social media, and artificial intelligence industries.
Elon Musk’s thinking in a merger is that the combined company would be a big name in the AI industry. Indeed, the two companies are already collaborating in Terafab, the semiconductor project in Texas.
The challenge of this merger, however, is that it would create a conglomerate in various industries: robotics, AI, vehicle manufacturing, space exploration, data centers, and social media. In most cases, it becomes highly difficult to value conglomerates.
Investors are embracing companies that emerge from conglomerates more. A good example of this General Electric. Before Larry Culp became GE CEO in 2018, the company was a conglomerate in various industries, with its energy business dragging the others.
To create value, he separated the business into three: GE Aerospace, GE Vernova, and GE Healthcare. Today, these firms are valued at $368 billion, $261 billion, and $31 billion, respectively. Before the spin-off, the whole company was valued below $150 billion.
Another good example is Western Digital, which decided to spin off SanDisk into a separate publicly traded company. Today, SanDisk has become a bigger company than Western Digital in market capitalization.
A combined Tesla and SpaceX would have some cash flow problems, at least initially. While Tesla is already a profitable company, SpaceX made a nearly $5 billion loss because of its AI investments.
Item 1 of 2 Tesla Chief Executive Officer Elon Musk gets in a Tesla car as he leaves a hotel in Beijing, China May 31, 2023. REUTERS/Tingshu Wang/File Photo
[1/2]Tesla Chief Executive Officer Elon Musk gets in a Tesla car as he leaves a hotel in Beijing, China May 31, 2023. REUTERS/Tingshu Wang/File Photo Purchase Licensing Rights, opens new tab
CompaniesSHANGHAI/BEIJING, July 31 - Tesla (TSLA.O), opens new tab is considering a separation of its China business to pave the way for a potential merger with SpaceX, the Wall Street Journal reported, citing a person familiar with the talks.
Reuters was unable to independently verify the report. Tesla and SpaceX did not immediately respond to requests for comment.
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Below are key facts regarding Tesla's operations in China:
THE GLOBAL PRODUCTION ENGINETesla's Gigafactory Shanghai began production in October 2019, becoming China's first wholly foreign-owned car plant and symbolising Beijing's opening of its automotive sector.
The factory has since become Tesla's largest and most productive site globally, serving as its main export hub for Europe, Canada and the Asia-Pacific region.
The plant produces the Model 3 compact sedan and Model Y sport utility vehicle and has annual production capacity of more than 950,000 vehicles, according to company data.
The Shanghai factory accounted for more than half of its global vehicle deliveries in 2025, Grace Tao, Tesla vice president in charge of external relations in China has said.
Tesla's other vehicle assembly plants are located in California, Texas and Berlin.
SUPPLY CHAIN AND EFFICIENCYTesla sources more than 95% of components for its China-made vehicles locally, relying on a network of more than 400 domestic suppliers, according to Tao. More than 60 of those suppliers also serve Tesla's global operations, she said.
The deep localisation of its supply chain has helped Tesla lower manufacturing costs and reduce exposure to global logistical disruptions.
Its China-made vehicle deliveries rose for an eighth consecutive month in June, helped by demand in overseas markets including Europe. Second-quarter sales from the Shanghai factory, including exports, increased by one third from a year ago.
DOMESTIC SALES AND COMPETITIONLocal production helped Tesla establish an early lead in China's premium EV market.
China was Tesla's second-largest market after the United States by revenue in 2025 and the Shanghai-built Model Y has been one of the country's best-selling passenger vehicles across all fuel type.
However, Tesla has faced intensifying competition from Chinese automakers since entering the market in 2019. Domestic rivals have narrowed the technology gap, while benefiting from integrated supply chains, faster product development cycles and aggressive pricing.
BYD has emerged as one of Tesla's biggest rivals in EV market, alongside a growing group of Chinese EV makers including Xiaomi, Xpeng and Li Auto.
Reporting by Zhang Yan, Ju-min Park and Chris Kirkham; Editing by Miyoung Kim and Lincoln Feast
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Dan Ives z Yorkville Ives & Co. na CNBC řekl, že investorům s Teslou dochází trpělivost. Tesla přitom podle něj není automobilkou, klíčové jsou její projekty a plány mimo tuto oblast. Do nich ale musí hodně investovat, v tom smyslu se tedy podobá firmám jako Alphabet, které také intenzivně investují do nových technologií. K tématu vysokých výdajů na nové technologie a reakcí akciového trhu pak své řekl i Steve Eisman, který se už nějakou dobu přiklání ke skeptičtějšímu investičnímu pohledu.
V případě hyperscalerů je důležité, aby se dostavila odpovídající návratnost investic do umělé inteligence, v případě Tesly zase návratnost do „fyzické AI“. Tedy například do robotů, které společnost vyvíjí a chce vyrábět. Ives k tomu dodal, že Musk na tom pracuje a zopakoval, že „AI revoluce je stále ve své počáteční fázi“. A zmínil i to, že podle něj je pravděpodobné, že se SpaceX spojí s Teslou.
Na CNBC se také diskutovalo o tom, že investoři se nyní zaměřují spíše na firmy, jejichž byznys model je nenáročný na investiční výdaje. Posun v sentimentu se mimo jiné projevuje na růstu sazeb u některých půjček financujících novou AI infrastrukturu. CNBC k tomu přidala následující graf vývoje ceny pětiletého CDS společnosti Oracle. CDS je pojištěním proti neschopnosti společnosti splácet své závazky a podle CNBC jej nyní investoři využívají i jako nástroj pojištění proti větším tenzím na aktivech spojených s umělou inteligencí. Graf také ukazuje, jak cena tohoto derivátu roste s tím, jak se v očích investorů zvyšuje riziko neschopnosti splácet dluhy.
Tématu vysokých investic do nových technologií se na svém Youtube kanálu věnoval i Steve Eisman. Poslední týden podle něj ukázal, že „debata se tu posunula“. Před rokem „se všichni radovali, když společnosti zvyšovaly své investiční výdaje do umělé inteligence.“ Nyní se klade důraz na to, jestli se tyto investice vyplatí. Podnikatelské modely se posunuly k velké kapitálové intenzitě a je otázkou, kdo a zda někdo bude mít vůbec nějakou udržitelnou konkurenční výhodu. K tomu se objevují modely z Číny, které stojí mnohem méně a roste pravděpodobnost cenových válek.
Podle Eismana se na akciovém trhu zvyšuje nervozita, a to se jasně projevilo, když své výsledky za poslední čtvrtletí zveřejnil Google. Jeho plány na další investice do AI a vývoj volného toku hotovosti, do kterého se tyto výdaje přímo promítají, totiž přinesly silnou negativní reakci trhu. Podobné to podle Eismana bylo s akciemi Tesly. Eisman sám považuje zveřejněná čísla Googlu „za maximálně smíšená“. Pozitivní je hlavně vývoj tržeb a cloudových služeb. Negativně vyznívá zmíněný volný tok hotovosti, který je v červených číslech. Navíc firma plánuje další růst investic do AI. Tesla také vykázala „velmi smíšené výsledky… Tržby byly dobré, problémem jsou marže,“ do kterých se promítá i značné omezení vládní podpory pro elektromobily. Volný tok hotovosti se pak i u této společnosti po dvou letech přesunul do záporu, ačkoliv tržby rostly.
The logo of Tesla is seen on a Tesla Model Y during Tesla Inc.'s official launch in Bogota, Colombia, November 20, 2025. REUTERS/Luisa Gonzalez/File Photo Purchase Licensing Rights, opens new tab
SummaryCompaniesSeparation options include spin off, sale or closure of China business, WSJ reportsExecutives also discuss separate sales entity for Shanghai exports, Journal saysGigafactory Shanghai has annual production capacity of more than 950,000 vehiclesJuly 30 (Reuters) - Tesla (TSLA.O), opens new tab executives have been told to prepare for a separation of its China business ahead of a potential merger with SpaceX (SPCX.O), opens new tab, the Wall Street Journal reported on Thursday, citing a person familiar with the talks.
A merger between Elon Musk's Tesla and SpaceX would raise geopolitical and regulatory hurdles, particularly in China, because SpaceX is a major U.S. defense contractor involved in national security and satellite programs, while Tesla operates wholly owned manufacturing facilities in China.
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Tesla and SpaceX could not be immediately reached for comment outside regular business hours.
Tesla advisers have discussed possible options for a separation, including a spin off, sale or closure, the WSJ report said, adding that it was unclear how quickly Tesla could move on the China business and that the plans could change.
CEO Musk had in recent years instructed Tesla executives to organize the company with a "laser" between its U.S. and China businesses, aiming to ensure that in the event of geopolitical strife between the two countries, at least the U.S. half of Tesla would survive, the Journal said, citing sources.
Unlike many foreign automakers, Tesla's Chinese vehicle business is not structured as a joint venture with a local partner.
Tesla's Gigafactory Shanghai remains its largest and most productive plant globally, serving as its key export hub for Europe and the Asia-Pacific region.
The facility historically accounts for more than half of Tesla's global deliveries, with an annual production capacity of more than 950,000 vehicles.
CHINA IS TESLA'S NO.2 MARKETSpaceX went public last month after a record $75 billion initial public offering and was valued at $1.48 trillion as of Thursday's close. Tesla has a market capitalisation of $1.22 trillion.
While Giga Shanghai acts as a vital export pipeline, China itself is Tesla's second-largest market globally after the United States, though it faces intense pressure from local players such as BYD.
The Journal reported that executives have also discussed creating a separate sales entity to handle exports from the Shanghai plant. Tesla could create separate office systems and bar China-based employees’ direct access to other company units, it added.
Earlier this month, Musk left the door open to the EV maker merging with his other trillion-dollar-plus-valued firm SpaceX, declining to dismiss the possibility and citing growing overlap between the companies.
SpaceX President and Chief Operating Officer Gwynne Shotwell has also acknowledged potential benefits, telling CNBC in June that folding the companies together "might make Elon's life a little easier" by streamlining management across his businesses.
However, JPMorgan analysts have pointed to the "practical bottleneck" of getting regulatory approvals for both companies, particularly in China, where national security concerns over SpaceX’s U.S. government ties could pose problems.
Through its China entity, Tesla achieved the lowest costs to manufacture its Model 3 and Model Y with the help of more than 400 domestic suppliers, a Tesla China executive has previously said, adding that more than 60 of them also supply Tesla globally.
Deliveries of China-made Model 3 and Model Y vehicles rose 24.4% year-over-year in June, while second-quarter sales and exports from the Shanghai factory increased 32.8%.
Tesla has said it sources locally more than 95% of the components in the China-made Model 3 and the refreshed version of the Model Y.
Reporting by Fabiola Arámburo, Chris Thomas and Mrinmay Dey in Mexico City, Ju-min Park in Beijing; Editing by Christian Schmollinger, Muralikumar Anantharaman and Lincoln Feast.
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Tesla (TSLA +3.53%) closed Wednesday at $298.32, down about 3%, after setting a fresh 52-week low during the session. The electric car maker is now worth about $1.18 trillion. The stock has fallen about 30% in 2026, including an 18% drop last week alone, its worst week since 2022.
That puts the $1 trillion line about 16% below Wednesday's close.
I don't think it stays above that line through year-end. My prediction is that Tesla trades below $1 trillion before 2027 begins, and the company's own numbers and guidance are the reasons.
Image source: Tesla.
Where the trillion-dollar line sits With about 3.95 billion shares outstanding, a $1 trillion market cap works out to a share price of close to $250. From Wednesday's close of $298.32, that's a decline of about 16%. For perspective, the stock fell more than that last week. And shares have already traveled a long way down from their 52-week high of nearly $500.
So the distance is as little as one bad week away -- not some far-off scenario.
And things aren't looking good lately.
Sure, Tesla's second-quarter revenue, fueled by record deliveries, climbed to $28.2 billion -- 26% more than a year earlier and a faster pace than the first quarter's 16%. But the quarter produced just $398 million of operating income, 57% less than a year earlier. And Tesla's operating margin came in at 1.4%, down from 4.1%. Adjusted earnings per share came in at $0.33, down 18%. Capital expenditures more than doubled from a year ago to $5.8 billion, pushing free cash flow into the negative.
The squeeze reaches the segment level, too. Automotive gross margin excluding regulatory credits slipped to 16.3% from 19.2% in the first quarter. And the energy storage business, even after deploying about 41% more capacity than a year earlier, saw its margin fall to 20.4% from 39.5% in the first quarter, partly on a warranty charge.
In short, demand isn't Tesla's problem. The profit-and-loss statement is. The company is selling more vehicles than in any prior second quarter and keeping almost none of the resulting profit, while pouring money into artificial intelligence (AI) computing, its robotaxi build-out, and its Optimus robot program.
And management says the spending gets bigger from here. Chief financial officer Vaibhav Taneja reiterated on the second-quarter earnings call that capital expenditures will exceed $25 billion this year, and he said they will keep growing through 2027 and 2028. The company is also securing debt facilities that would let it borrow up to $30 billion.
"[W]e should be spending on [capital expenditures] as fast as we can without it being too wasteful," CEO Elon Musk said on the call.
That may prove to be the right long-term strategy. But there are two problems. First, over the next five months, it points to more quarters in which costs grow faster than profits. And second, there's a level of speculation involved with spending like this. In other words, there's a chance that it doesn't pay off as well as expected. This means the stock's risk profile is increasing and this could lead to selling for investors who are looking for more certainty.
Today's Change
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What would have to go right For Tesla to hold above $1 trillion, investors would need to keep paying about 275 times earnings (the stock's current multiple) for shrinking earnings. Even at a 52-week low, shares aren't cheap on any near-term measure, so there's no bargain price sitting just below to attract buyers -- and sentiment has been souring for a month.
The window between now and January should include at least two major updates: third-quarter production and deliveries, followed by the third-quarter report, likely in late October. Management expects capital spending to accelerate in the second half while operating expenses keep rising, so that report seems more likely to extend the pattern than to break it.
Could something rescue the line? Sure. The robotaxi service has logged 380,000 unsupervised miles, and management says the fleet's weekly mileage has kept compounding at a high rate. A splashy robotaxi expansion or an AI announcement could spark a sharp rally, and this stock has rallied on less. That's the main risk to this call, and it's the one I'd take most seriously. A five-month window doesn't leave much room to be early.
However, a sentiment rally would have to fight the company's own income statement, quarter after quarter, with the stock already at 275 times earnings. Ultimately, I think Tesla finishes the year worth less than $1 trillion. If the third-quarter report shows operating profit turning back up while the spending continues, I'll revisit that. But nothing in the company's guidance points that way today.
Tesla shares are trending higher. Why are TSLA shares climbing? Microsoft’s Record Quarter Sends Technology Stocks SurgingThe sector rose 5.24%, the strongest performance of any group on the session, generating a rising tide that is pulling high-beta names including Tesla meaningfully higher. Consumer Discretionary, the sector where Tesla sits, gained 0.66% to rank second among the eleven groups.
The session’s advance/decline ratio of 0.8 introduces a note of caution however, signaling that participation beneath the surface is narrower than the headline index gains imply and that the rally could remain uneven.
Critical Levels to Watch for TSLAThursday’s move is welcome for bulls but does not yet alter the stock’s longer-term technical standing. Tesla remains 16.4% beneath its 20-day moving average, 21.6% below its 50-day and 25.3% under its 200-day, a layered configuration of overhead supply that keeps the trend pointed lower until buyers can demonstrate the ability to reclaim those levels with follow-through.
The nearest meaningful ceiling sits at $349.00, a round-number zone close to the short-term trend area where prior attempts at recovery have repeatedly run out of conviction.
TSLA Shares Are RisingTSLA Price Action: Tesla shares were up 3.21% at $307.90 at the time of publication on Thursday, according to Benzinga Pro.
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Tesla shares rebounded on Thursday after six consecutive losing sessions, benefiting from a broad technology rally fueled by Microsoft's stronger-than-expected quarterly results rather than company-specific developments.
Shares of the electric vehicle maker rose about 3.7% to $309.44 in trading, while the S&P 500 gained 1.68% and the Dow Jones Industrial Average advanced 1.21%.
The broader rally followed Microsoft's quarterly earnings report, which exceeded Wall Street expectations and eased investor concerns over returns from artificial intelligence investments.
Microsoft reported earnings per share of $4.81, up from $3.65 a year earlier and above analyst estimates of $4.24.
The company's shares surged nearly 17%, helping lift sentiment across AI-related technology stocks.
Tesla, like Microsoft, is considered part of the "Magnificent Seven" group of megacap technology companies.
While Microsoft is expanding its AI business through cloud services, Tesla continues to invest heavily in artificial intelligence for autonomous driving and robotics.
Thursday's rally was largely driven by Microsoft's earnings, which highlighted continued strength in its Azure cloud business.
Microsoft reported fourth-quarter revenue of $90.01 billion, an 18% increase from a year earlier that exceeded the consensus estimate of $87.62 billion.
Azure and other cloud services revenue grew 43%, while earnings per share of $4.74 also topped expectations.
The technology sector gained 5.33%, making it the strongest-performing group during the session.
Tesla also benefited as investor appetite returned to higher-beta technology stocks.
Consumer Discretionary, Tesla's sector, rose 1.91%, ranking second among the market's eleven major sectors.
Despite the rally, market breadth remained relatively narrow, with the session's advance-to-decline ratio suggesting gains were concentrated in a smaller group of stocks.
Tesla's rebound followed a difficult stretch after the company reported weaker-than-expected second-quarter earnings.
Before Thursday's recovery, the stock had declined for six straight sessions and closed below the $300 level for the first time in more than a year.
Tesla's latest earnings disappointed investors after the company reported operating profit of roughly $400 million, approximately $1.3 billion below analyst projections.
Beyond earnings, investors remain focused on Tesla's artificial intelligence strategy.
The company launched its AI-trained robotaxi service in Austin, Texas, in June 2025, but the rollout to additional cities and expansion of the fleet has progressed more slowly than many investors had anticipated.
Market participants continue to look for company-specific AI developments that could support Tesla shares independently of broader technology sector strength.
Technical picture remains challengingDespite Thursday's gains, Tesla's longer-term technical indicators continue to point to weakness.
The stock remains 12.65% below its 20-day moving average, 18.35% below its 50-day moving average and 20.83% below its 200-day moving average, indicating persistent overhead resistance.
A death cross that formed in April, when the 50-day moving average fell below the 200-day moving average, remains in place.
Momentum indicators also remain weak, with the MACD below its signal line and the histogram in negative territory.
The nearest major resistance level is around $349, an area where previous recovery attempts have struggled to gain traction.
While Thursday's rally offered some relief following the post-earnings selloff, investors continue to watch for stronger AI-related catalysts and improving fundamentals before sentiment shifts more decisively.
Tesla has built its 10 millionth electric vehicle, according to a social media post by the company early on Thursday. The milestone comes six years after the company built its one millionth vehicle.
Crossing the 10 million mark means Tesla is halfway to reaching one of the four core “product goals” that unlocks the full value of CEO Elon Musk’s $1 trillion pay package, which shareholders approved last year. By 2035, Musk has to ensure the company builds 20 million vehicles, reaches 10 million active subscriptions for its “Full Self-Driving” software, delivers one million “bots,” and puts one million robotaxis on the road.
Despite a few years of intense growth on the backs of the Model 3 and Model Y, Tesla has not been able to sell 2 million vehicles in a single year. If it keeps up that pace, or slows further, it will take the company until at least the early 2030s to hit the 20 million mark.
Tesla has less competition in the United States now, though, as major automakers have pulled back from the electric vehicle market, and startups like Rivian and Lucid Motors have struggled to reach scale. Nevertheless, Tesla is still struggling in its home market. Its U.S. sales fell 13% year-over-year in the second quarter, and the company had to look to newer markets like Japan, Australia and Lithuania to court buyers.
Musk used to promise that Tesla would make 20 million cars per year by 2030, but he abandoned that idea a few years ago as the company’s sales slowed down. Still, of the four product goals, this is the one Tesla is closest to achieving.
The company recently reported just shy of 1.5 million FSD subscribers, though it’s not clear if it is counting free trials — those would not count towards the official product goal laid out by Tesla’s board of directors last year. The carmaker is only in the earliest stages of building robots and robotaxis.
Musk also has to increase the company’s profit (adjusted EBITDA) to $400 billion by 2035 in order to access the full share package. That looks challenging at the moment, too, as the company’s adjusted EBITDA currently hovers around $3.27 billion, and has been shrinking lately thanks to heavy discounts, the loss of saleable regulatory credits, as well as a dramatic increase in spending on new efforts like AI and robotics.
As for the competition, the only other company at the same level is China’s BYD, which recently crossed 17 million “new energy vehicles” built and sold, roughly half of which were hybrids.
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Sean O’Kane is a reporter who has spent a decade covering the rapidly-evolving business and technology of the transportation industry, including Tesla and the many startups chasing Elon Musk. Most recently, he was a reporter at Bloomberg News where he helped break stories about some of the most notorious EV SPAC flops. He previously worked at The Verge, where he also covered consumer technology, hosted many short- and long-form videos, performed product and editorial photography, and once nearly passed out in a Red Bull Air Race plane.
You can contact or verify outreach from Sean by emailing [email protected] or via encrypted message at okane.01 on Signal.
After a 30% drop in less than a month, it’s fair to say that Wall Street is more divided on Tesla Inc. NASDAQ: TSLA than it has been in years. The company's latest earnings report, released last week, delivered a jarring split between record headline revenue and a sharp deterioration in profitability, and the market has been trying to make sense of it in the days since.
Tesla Today
$305.24 +6.92 (+2.32%)
As of 12:47 PM Eastern
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52-Week Range$297.38▼
$498.83P/E Ratio282.67
Price Target$402.24
Out of that confusion, two starkly different visions of Tesla's future have emerged. One camp sees a core business whose margins are collapsing under the weight of enormous artificial intelligence spending, and is heading for the exit.
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The other can look beyond the quarter and toward a potential merger with SpaceX NASDAQ: SPCX that could reshape the entire company.
Which of these two paths the stock ultimately follows may matter far more than any single line in the earnings report.
Path #1: A Core Business That’s Under Severe PressureThe bearish case is grounded in what the numbers actually showed. Yes, headline revenue grew strongly year-over-year, but operating margin collapsed more than 60% from where it was a year earlier while free cash flow turned negative. Earnings per share missed expectations as capital spending surged.
Dig beneath the headline numbers, and the picture looks starker still. A large chunk of Tesla's reported net income came from a one-off gain on its stake in SpaceX rather than from selling cars or storing energy. Strip that out, along with fading regulatory credit income, and the underlying profitability shrinks dramatically. For a company still valued as one of the most expensive mega-cap stocks in the market, that’s an uncomfortable place to be.
The bigger concern is that the spending shows no sign of slowing. Tesla's capital expenditure plans have ballooned to enormous levels, funding everything from its Optimus robots and Cybercabs to new factories and fresh AI initiatives. None of these have a clear near-term path to profitability, however, making Tesla, in the eyes of the bears, a stock best left alone.
Path #2: The SpaceX CardThe bulls, meanwhile, are focused on something else entirely. On the earnings call, CEO Elon Musk acknowledged the growing overlap between Tesla and SpaceX, particularly around their shared chip ambitions. However, he was careful not to confirm any formal merger discussions.
Given there had already been plenty of talk around the possibility of a merger, his comments were enough to send speculation into overdrive, with Deepwater Asset Management's Gene Munster raising the odds of an eventual merger combination to 90%.
The vision behind a deal is undeniably ambitious. Proponents describe a business that would knit together SpaceX's satellite connectivity, Tesla's real-world AI, and orbital computing into a single vertically integrated AI ecosystem.
RBC Capital Markets analyst Tom Narayan has gone as far as to model specific deal terms, arguing that a combination at a hypothetical $480 per Tesla share, a premium of more than 60% to the current price, would leave existing shareholders owning more than half of a combined entity worth trillions.
If that vision were to come to pass, then the margin questions hanging over Tesla’s car business today would end up looking like a footnote.
Why the Merger Thesis Is Still FragileThere is a significant catch, however. Far from being a rock-solid backstop, SpaceX's own valuation has been anything but stable. Its shares have fallen by around 40% from their June peak, as its pre-IPO hype evaporates and the company suffers from the same AI spending fears that have been hitting tech valuations.
There is also the simple fact that a future combination would merge two intensely capital-hungry businesses rather than pairing a cash generator with a growth project. SpaceX may boast stronger margins than Tesla in places, but it remains deeply unprofitable and is burning through cash on its own huge investment cycle. Far from being an antidote to Tesla’s woes, it could be a poisoned chalice.
Which Path Is Tesla On?Based on the stock’s recent price action at least, it’s hard not to feel that Tesla’s near-term path belongs firmly to the first camp. The dramatic margin compression, the negative free cash flow, and the enormous spending plans are already reported facts, sitting in black and white in the latest earnings report.
The SpaceX merger, by contrast, remains speculative, with no formal process announced and Musk's own comments carefully hedged. For now, the SpaceX play should best be treated as a potential upside catalyst layered on top of a Tesla comeback story that has yet to materialize.
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Tesla is the only automaker to have produced 10 million electric vehicle. The stock rose as much as 2.7% on Thursday, likely ending a severe post-earnings slump.
It's been a rough year so far for Tesla (TSLA +2.10%), and it got worse after it reported its second-quarter earnings on July 22. Although the company had record Q2 vehicle deliveries, produced record revenue, and achieved $100 billion in revenue over the past 12 months, its stock tanked after reporting earnings.
On the surface, there were a handful of encouraging things about Tesla's earnings, but the reason for its slump comes down to the $25 billion in capital expenditures (capex) the company is planning for this year. This follows a trend Wall Street has seen recently with many big tech and AI-related stocks.
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Does Tesla have a spending issue? A company's capex is what it spends on things such as machinery, buildings, and other infrastructure. It's a necessary expense to support growth, but sometimes, a company can take its spending too far. The $25 billion in capex that Tesla estimates for this year is much smaller than other "Magnificent Seven" companies', but it's almost triple the $8.5 billion it spent last year.
Image source: Tesla.
In Q2, Tesla's capex was $5.8 billion, up around 142% from the $2.4 billion it spent in Q2 2025. Although the increased capex isn't a surprise (it's been the theme across all big tech companies), it's obvious that investors feel as though spending is outpacing return potential, mainly because of how it's hurting free cash flow.
TSLA Capital Expenditures (Quarterly) data by YCharts.
The spending isn't bad in and of itself, but the alarming part for many investors was the fact that Tesla's free cash flow was negative $1.1 billion and its cash and investments decreased by $1.2 billion. You could chalk up the increased spending to being a means to an end, but there needs to be a much clearer "end" in this case.
Is Tesla's stock a buy right now? Although Tesla is a car company at its core, its selling point isn't its electric vehicles. It's the promise of its robotaxi network and humanoid robots. Unfortunately, though, there hasn't been enough progress to justify how expensive Tesla's stock currently is.
At the time of writing, Tesla is trading at 171.1 times its projected earnings for the next 12 months, much more than any other "Magnificent Seven" stock. The next closest is Apple, trading at 38.8 times its projected earnings.
Right now, it's hard to justify investing in Tesla given how much is riding on its long-term ambitions without substantial progress toward them. That doesn't make it a bad company -- just a not-so-good stock to invest in right now.
Tesla is having a July to forget, and Cathie Wood is taking the other side of the trade. With the stock in near freefall since its Q2 earnings miss, Tesla (NASDAQ: TSLA | TSLA Price Prediction) closed Wednesday at $298.32, down 27.56% in the past month and 33.67% year to date.
Our 24/7 Wall St. price target for Tesla is $381.33, implying 27.82% upside, and we rate the stock a buy with high confidence at 90%. Wood looks directionally right.
24/7 Wall St. Price Target Summary Metric Value Current Price $298.32 24/7 Wall St. Price Target $381.33 Upside 27.82% Recommendation BUY Confidence Level 90% How Tesla Got to Its Worst July The selloff traces to the July 22 Q2 report. Revenue of $28.24 billion beat by 7.1% on record deliveries of 480,126 vehicles, but non-GAAP EPS of $0.33 missed the $0.54 consensus by 38.51%.
Operating margin collapsed to 1.4%, free cash flow swung to negative $1.09 billion, and OpEx jumped 47% as AI infrastructure and Optimus buildout pressured the P&L. Shares have since given up 20.24% in a single week, trading within a dollar of its 52-week low of $297.82.
Why Bulls See a Breakout Ahead Wood’s dip-buying reflects a legitimate operating story beneath Q2’s ugly EPS. FSD subscriptions hit 1.48 million, up 56%, with a 55% attach rate on new North American deliveries. Robotaxi expanded to seven US metros, Cybercab production began at Gigafactory Texas, and cash climbed to $43.52 billion, up 179% year over year.
The Street’s consensus target sits at $399.45, and our bull case models a $463.24 one-year target if Optimus and Robotaxi monetization accelerate. ARK has framed Tesla primarily as an AI and autonomy platform.
What Could Go Wrong The bear case starts with valuation. Even after the selloff, Tesla trades at a 171x implied forward P/E, and Q2’s $5.79 billion in capex means free cash flow stays stressed. Reddit sentiment turned bearish post-earnings, with r/stocks scoring between 28 and 38. Polymarket assigns just a 15.5% probability to an Optimus release by year-end.
Our bear case pegs the one-year floor at $344.21. Bulls counter that margin compression reflects heavy investment spending, and the 50% Services growth suggests the software flywheel is real.
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How Tesla Compares to General Motors and Rivian General Motors (NYSE: GM) offers a valuation contrast. GM trades near $89 with a P/E of 30 and raised full-year adjusted EPS guidance to $12 to $14, implying a forward P/E of roughly 7. That fraction of Tesla’s multiple makes our $381.33 target look aggressive on legacy-auto math but reasonable if you underwrite Tesla’s AI segments.
Rivian (NASDAQ: RIVN) is the growth-stage EV counterpoint. Rivian posted Q1 2026 revenue of $1.38 billion, up 11.4%, with software and services growing 49% on the Volkswagen JV, but burned $1.08 billion in free cash flow. Compared to Tesla’s $43.52 billion cash pile and profitable auto segment, Tesla looks like the safer EV bet.
Company P/E Market Cap Tesla 311 $1.18T General Motors 30 $80.9B Rivian N/M (unprofitable) $23.6B The Bottom Line at $298 Wood is on the right side of this trade. Our 24/7 Wall St. price target of $381.33 implies 27.82% upside with 90% confidence, and Tesla trades within a dollar of its 52-week low. The bull thesis rests on whether FSD, Robotaxi, and Optimus produce meaningful revenue by 2027.
The bear thesis hinges on whether the $25 billion capital budget destroys returns before the AI story arrives. On balance, the risk-reward at $298 skews constructive.
Extending our price target model at a 15.31% base-case annualized trajectory:
Year 24/7 Wall St. Price Target 2026 $345 2027 $381 2028 $460 2029 $530 2030 $608 These projections assume Tesla executes on Robotaxi, Optimus, and FSD monetization. Significant upside or downside could result from autonomy regulation or a slower Optimus ramp.
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SummaryTesla, Inc. remains a hold despite a 27% correction, as extended capex commitments signal a multi-year build phase and near-term cash flow pressures.SpaceX, aka Space Exploration Technologies Corp., is favored for starter buy positions pre-Q2, offering concentrated autonomy and AI exposure, thematic purity, and a compelling narrative-driven growth path.TSLA’s financials are pressured by capex and operational weakness, while SpaceX’s valuation hinges on achieving ~$39B in 2026 revenue and sustaining its innovation narrative.SpaceX’s scarcity and creator positioning in AI and compute, along with deferred revenue and low institutional ownership, support its forward potential despite high multiples. Sven Piper/iStock Editorial via Getty Images
I upgraded Tesla, Inc. (TSLA) to a Hold in February 2026, interestingly counting on the capex spending above $20b, where I have used capex spending as evidence for caution for most hyperscalers in
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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Arkadios Wealth Advisors boosted its holdings in Tesla, Inc. (NASDAQ:TSLA – Free Report) by 15.2% in the 1st quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The firm owned 38,553 shares of the electric vehicle producer’s stock after purchasing an additional 5,088 shares during the quarter. Arkadios Wealth Advisors’ holdings in Tesla were worth $14,332,000 at the end of the most recent quarter.
Several other institutional investors have also bought and sold shares of TSLA. Networth Advisors LLC purchased a new stake in shares of Tesla in the fourth quarter valued at about $26,000. Chapman Financial Group LLC bought a new stake in shares of Tesla in the 2nd quarter worth approximately $26,000. Davidson Capital Management Inc. raised its holdings in shares of Tesla by 79.4% in the 4th quarter. Davidson Capital Management Inc. now owns 61 shares of the electric vehicle producer’s stock worth $27,000 after purchasing an additional 27 shares during the period. Friedenthal Financial lifted its stake in Tesla by 66.7% in the first quarter. Friedenthal Financial now owns 75 shares of the electric vehicle producer’s stock valued at $28,000 after purchasing an additional 30 shares during the last quarter. Finally, Prism Advisors Inc. bought a new position in Tesla during the fourth quarter valued at $30,000. Institutional investors own 66.20% of the company’s stock.
Insider Transactions at Tesla In related news, CFO Vaibhav Taneja sold 3,000 shares of the stock in a transaction on Wednesday, May 13th. The stock was sold at an average price of $450.00, for a total value of $1,350,000.00. Following the transaction, the chief financial officer owned 18,106 shares of the company’s stock, valued at $8,147,700. This represents a 14.21% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Company insiders own 19.90% of the company’s stock.
Analysts Set New Price Targets TSLA has been the subject of several recent research reports. Glj Research reissued a “sell” rating on shares of Tesla in a report on Tuesday, July 21st. Needham & Company LLC reissued a “hold” rating on shares of Tesla in a research report on Thursday, July 23rd. Truist Financial set a $370.00 price objective on shares of Tesla and gave the stock a “hold” rating in a report on Thursday, July 23rd. Zacks Research raised shares of Tesla from a “strong sell” rating to a “hold” rating in a report on Tuesday, April 28th. Finally, BTIG Research downgraded Tesla to a “neutral” rating in a research report on Friday, June 5th. One analyst has rated the stock with a Strong Buy rating, twenty-one have issued a Buy rating, nineteen have given a Hold rating and four have issued a Sell rating to the stock. According to data from MarketBeat, Tesla currently has an average rating of “Hold” and an average price target of $402.24.
Get Our Latest Stock Report on TSLA
Key Stories Impacting Tesla Here are the key news stories impacting Tesla this week:
Positive Sentiment: Tesla’s long-term growth initiatives received support from Cathie Wood’s ARK Invest, which continued buying Tesla shares after the selloff. Some analysts also maintain bullish targets based on potential growth in Full Self-Driving, robotaxis and Optimus humanoid robots. Cathie Wood Doubles Down on Tesla Stock Positive Sentiment: The company signed long-term renewable-power purchase agreements in Arizona and Texas, while its Optimus division expanded teleoperation capabilities through an acquisition from Virtuix. These moves support Tesla’s energy and robotics strategies, although they are not yet major earnings contributors. Tesla Secures Long-Term Power Deals and Expands Optimus Teleoperation Positive Sentiment: Technical indicators show TSLA is at its most oversold level in more than a year, raising the possibility of a short-term rebound. Morningstar also described the post-earnings decline as an attractive buying opportunity. Tesla Stock Hasn’t Been This Oversold in More Than a Year Neutral Sentiment: Tesla won a bid to revive a UK lawsuit involving 5G patent licensing, but the legal development is unlikely to materially change near-term financial results. Tesla Wins Bid to Revive UK Lawsuit Negative Sentiment: Second-quarter EPS missed estimates by approximately 34%, despite a revenue beat. Operating income fell sharply, free cash flow turned negative and capital expenditures rose substantially, intensifying concerns about margins and cash generation. Negative Sentiment: The stock has fallen for five straight sessions and is trading below key moving averages, near its 52-week low. Although the shares are oversold, valuation remains elevated relative to current automotive earnings, leaving little room for execution disappointments. Tesla Stock Breaks $300 Negative Sentiment: Investor confidence is also being pressured by delays and execution risks surrounding robotaxis and Optimus, increased competition from Ford and BYD, and the strong performance of bearish Tesla ETFs. Tesla Stock Suffered Its Worst Week Since 2022 Tesla Stock Down 3.0% TSLA stock opened at $298.32 on Thursday. The company’s 50 day moving average is $394.41 and its 200 day moving average is $399.48. The stock has a market cap of $1.18 trillion, a price-to-earnings ratio of 276.22, a price-to-earnings-growth ratio of 15.71 and a beta of 1.80. The company has a current ratio of 1.94, a quick ratio of 1.55 and a debt-to-equity ratio of 0.09. Tesla, Inc. has a 1-year low of $297.38 and a 1-year high of $498.83.
Tesla (NASDAQ:TSLA – Get Free Report) last released its quarterly earnings results on Wednesday, July 22nd. The electric vehicle producer reported $0.33 EPS for the quarter, missing analysts’ consensus estimates of $0.50 by ($0.17). The company had revenue of $28.24 billion during the quarter, compared to analysts’ expectations of $26.42 billion. Tesla had a return on equity of 3.82% and a net margin of 3.67%.Tesla’s quarterly revenue was up 25.5% on a year-over-year basis. During the same period in the prior year, the firm earned $0.33 EPS. Sell-side analysts predict that Tesla, Inc. will post 0.9 EPS for the current fiscal year.
About Tesla (Free Report)
Tesla, Inc (NASDAQ: TSLA) is an American company that designs, manufactures and sells electric vehicles, energy generation and energy storage products. Founded in 2003 by Martin Eberhard and Marc Tarpenning, Tesla grew into a vertically integrated mobility and clean‑energy company with Elon Musk serving as its chief executive officer. The company’s stated mission is to accelerate the world’s transition to sustainable energy, reflected in its combined focus on electric drivetrains, battery technology, renewable energy products and software.
Tesla’s automotive business includes a lineup of battery‑electric vehicles and related services.
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It's been a tough summer for the stocks of Elon Musk-backed Space Exploration Technologies (SPCX -3.32%), also known as SpaceX, and Tesla (TSLA -2.97%), which have both recently been in free fall. However, despite their dips, I think both stocks have a lot further to fall.
Let's dig into why I think both stocks have considerable downside from here.
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After soaring following its June initial public offering (IPO), SpaceX shares quickly reversed course and have been falling ever since. The initial rise in the stock was largely supported by the company selling only a small percentage of its shares at the public debut and by the excitement over Musk's vision for the company's future.
Musk has made some bold claims about SpaceX, saying it will eventually be worth more than Earth itself and that it will develop data centers in space and terrestrial transport. However, these endeavors all have huge technological and other hurdles.
For example, to have data centers in space, SpaceX or another company would need to develop chips that can withstand cosmic radiation, as well as a cooling system that works in the vacuum of space. Meanwhile, terrestrial cargo transport would require building landing infrastructure and having countries like the U.S. and China work together.
With less than $19 billion in revenue in 2025, SpaceX's at-one-time $2 trillion valuation was based more on Musk's vision of the future than the company's current performance. Its StarLink satellite internet service is a nice business, but it serves more as a niche product and is unlikely to ever compete with wireless carriers due to technical limitations in densely populated areas. Meanwhile, its artificial intelligence (AI) and satellite launch businesses are currently losing money.
Morgan Stanley projects that SpaceX won't become free cash flow positive until 2035, which also means the company will have to raise a lot more capital during the next decade to fund these futuristic projects. At 38 times 2026 analyst revenue estimates, the stock is still steeply overvalued given its current business. Meanwhile, the stock will face a big headwind throughout the rest of the year as shareholder lock-ups expire, letting insiders and early investors sell more shares on the open market.
With SpaceX's largely successful recent test flight of Starship doing little to help the shares rally, and no valuation support, the stock has a long way to fall.
Image source: Getty Images.
Tesla
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Like SpaceX, Tesla's valuation is largely predicated on Musk's vision for the company. Its core electric vehicle (EV) business has been struggling. Auto sales fell in 2025, as Musk's foray into politics upset many EV consumers and hurt sales. Meanwhile, the end of CAFE (corporate average fuel economy) penalties in the U.S. removed one of Tesla's biggest appeals, as its high-margin regulatory credit revenue cratered.
Today, much of Tesla's value is tied to its robotaxi and robotics ambitions. However, the company's robotaxis have largely been stuck in neutral, failing to meet Musk's promise of a nationwide fleet by the end of last year. Instead, it has a limited network in Texas and Florida, while rival Waymo, owned by Alphabet, has been expanding aggressively across cities throughout the U.S. Although Tesla's vision-only driverless approach makes sense from a cost standpoint, safety issues surrounding its tech have thus far left it behind.
At the same time, Musk has admitted that scaling its Optimus robots will be difficult. It still faces technical challenges, and there is no supply chain in place, given how new the robots' parts are.
Tesla also has another big project with its Terafab megafoundry, but manufacturing advanced chips is difficult, and even Nvidia Chief Executive Officer Jensen Huang warned Musk that it would be nearly impossible to match Taiwan Semiconductor Manufacturing's capabilities.
Tesla also now faces a SpaceX problem. Before the SpaceX IPO, Tesla was the only way to invest in Musk and his futurist visions, but now the two stocks are competing against each other, and it's been causing them both to lose. With a forward price-to-earnings (P/E) ratio of more than 150, a struggling core business, and future bets that have run into obstacles, Tesla stock has plenty of potential downside.
Wall Street history was made seven weeks ago, with Elon Musk's Space Exploration Technologies (SpaceX) (SPCX -3.32%) setting a new bar for initial public offerings. The $85.7 billion SpaceX raised, including the underwriters' overallotment, practically tripled the previous recordholder, Saudi Aramco.
But history isn't done being made, according to the bettors at prediction market Kalshi. As of July 25, there was 74% probability that SpaceX and Musk's other trillion-dollar company, Tesla (TSLA -2.97%), would merge before May 1, 2027.
While combining these two companies would be nostalgic, two negatives won't make a positive on Wall Street.
Image source: Getty Images.
The recent surge in merger speculation between Elon Musk's trillion-dollar companies traces back to Tesla's latest quarterly conference call. When asked by Wells Fargo analyst Colin Langan if SpaceX and Tesla would one day merge, he didn't say no.
Although Musk didn't offer any guarantees of a merger, either, he did note, "as you can tell from the many collaborations on so many fronts with SpaceX, there's more and more overlap, especially with Terafab, that's really going to be a gigantic project."
BREAKING: Odds Tesla and SpaceX merge within the next year skyrocket to 74% -- a record high. pic.twitter.com/hQNQdOYmjf
-- Kalshi (@Kalshi) July 25, 2026 Terafab is a joint-venture semiconductor manufacturing project between Tesla, SpaceX, and artificial intelligence (AI) start-up xAI. It represents arguably the biggest connection between Tesla and SpaceX, but far from the only one. For instance, SpaceX's satellite-based broadband service, Starlink, will be integrated directly into Tesla's Cybercab.
From an investment standpoint, perhaps the biggest attraction of a SpaceX-Tesla merger is that it would bring everything under one roof for Elon Musk. Tesla's stock has wavered amid concerns that Musk is distracted by other projects (and companies).
Given the otherworldly gains Musk has overseen at Tesla since it went public in June 2010, combining these two businesses could tug on investors' heartstrings -- at least initially.
Image source: Getty Images.
A negative times a negative only equals a positive in mathematics (not on Wall Street) While a merger of equals run by the same boss would seem to make some sense on paper, there are several reasons to believe it would be a logistical nightmare for investors.
For example, even though Musk pointed to "more and more overlap" between his public companies during Tesla's latest conference call, there isn't much in the way of cost synergies. There's a big difference between Tesla being a customer of SpaceX (or vice versa) and combining two aesthetically different businesses and expecting them to be more cost-efficient.
SpaceX in IPO filing: "We believe we have identified the largest actionable total addressable market in human history. We estimate that our quantifiable TAM is $28.5 trillion, consisting of $370 billion in Space from space-enabled solutions; $1.6 trillion in Connectivity across... https://t.co/CBTpfJECik pic.twitter.com/yh54mKFlQE
-- Sawyer Merritt (@SawyerMerritt) May 20, 2026 Additionally, SpaceX is quite a ways away from proving it's a sustainable business. Despite SpaceX claiming it has a $28.5 trillion addressable market, the business (outside of Starlink) isn't profitable. It's highly capital-intensive and prone to production delays. Tying that business to a recurringly profitable Tesla would be a drag on the latter.
However, Tesla's profit isn't all it's cracked up to be, either. A significant chunk of Tesla's pre-tax income has been driven by interest income and automotive regulatory credits (i.e., non-sustainable sources of income).
Combining SpaceX and Tesla would be messy and expose just how many of Elon Musk's unfulfilled promises have been baked into the valuations of both companies.
Tesla's (TSLA -2.97%) second-quarter update failed to impress the market. The company's core electric vehicle (EV) business performed well, with deliveries growing by a strong 25% year over year to 480,126, well ahead of the consensus analyst estimate. This helped power healthy top-line growth. The company's revenue climbed by 26% year over year to $28.2 billion. However, Tesla didn't perform nearly as well on the bottom line, with its adjusted earnings per share declining 18% year over year to $0.33.
Tesla's stock fell sharply following its earnings release, but some famous names on Wall Street, including Cathie Wood, saw the dip as a buying opportunity. Wood's firm, Ark Investment Management, bought Tesla stock on more than one occasion after the earnings-related drop, purchasing about $53.5 million in shares as of writing. If there is a rebound on the horizon, that's a great move. Let's see whether that's the case.
Image source: Getty Images.
Can Tesla's projects live up to the hype? Tesla's work on its robotaxi project will likely have the biggest impact on its stock performance in the near term (and perhaps in the long term as well). The company is making progress. Since launching robotaxis in Austin last year, the service is now available across six U.S. cities. According to management, Tesla's unsupervised miles driven per week have grown at double-digit rates since 2026 started, and it expects to maintain that pace through the end of the year. Further, as the company points out, it hasn't had a single notable incident, despite its fleet of unsupervised vehicles driving more than 380,000 miles.
Needless to say, if Tesla can keep that safety record while growing at the pace management expects through the end of the year, the market could reward the stock. Of note, Tesla's EPS declined because of significant capex, partly to support its robotaxi project. If this business scales quickly, that will justify its investments and attract at least some of these otherwise skeptical investors. Elsewhere, Tesla also said it would begin production of its latest Optimus humanoid robot soon.
That is another project that could jolt the stock. If Tesla reveals the Optimus 3 by year-end, and it is nearly as impressive as the company said it would be, the stock could jump significantly.
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That said, Tesla is famous for making grand promises and underdelivering. That doesn't mean the company will do the same this time around, but it's a huge risk to take management's word for it. Buying Tesla stock right now, expecting a rebound over the next six months (or so), likely isn't a wise move. But what if we focus on the long term? Tesla's ambitions could certainly unlock a large opportunity.
Its robotaxi business could become a significant source of revenue and higher margin profits than the sale of electric vehicles. But it's worth noting that Waymo, which Alphabet (GOOG +0.95%) (GOOGL +0.90%) owns, currently has a far larger fleet than Tesla.
Also, as management's recent comments highlight, the company's robotaxi business faces risks. Elon Musk rightly pointed out that a single accident would attract significant attention, including from regulators, and make it harder for Tesla to secure the approvals necessary to operate its robotaxi fleet. Accidents haven't happened to the company yet, but investors should keep the possibility in mind. With all that said, Tesla is a risky stock, even though it has significant upside potential. Invest accordingly.
Tesla’s Valuation Draws Gary Black’s CriticismIn a series of posts on the social media platform X, the investor reaffirmed his view of Tesla’s valuation while also criticizing the EV maker’s bullish supporters. “Investors who refuse to compare valuation vs price are doomed to overpay for great companies like $TSLA,” he said in his post.
Black then shared his calculation for determining Tesla stock’s value. “My valuation is 2030 EPS of $7.75 x a P/E that reflects 35% long-term earnings growth,” he said.
Black said his valuation assumes 2030 earnings per share of $7.75 and a price-to-earnings multiple reflecting 35% long-term annual earnings growth using a megacap average 2x PEG ratio.
The investor then said that his calculation reflects a “discounted…14.8% risk-adjusted cost of equity.” The investor mentioned that the 14.8% figure was calculated by using a 10-year risk-free Treasury rate of 4.6%, as well as the Equity Risk Premium, which is the additional return stocks offer for risk-free investments like Treasury bills, at 6% and Tesla’s 1.7x beta, which reflects the stock’s volatility compared to other stocks.
“$7.75 x 70x / (1.148)^4 = $312,” he said. The investor then calculated his buy price for Tesla. “Buy price: $312 x 80% =$250,” Black said, sharing that he would price the stock at $250. “As my followers know, my discipline is to buy stocks at a 20% discount to their fair market value to get enough upside vs other stocks in my universe,” the investor said.
Using those assumptions, Black calculated a fair value of $312 before applying his usual 20% margin of safety, resulting in a buy price of $250.
Black also shared how investors fall in love with a company, but they should not fall in love with a stock. “Value is what you get. Price is what you pay,” he said.
Economist Peter Schiff had also outlined similar concerns with SpaceX, saying that the AI-induced bubble in the U.S. stock market would be popping, after he had said that the bubble had peaked around the time of SpaceX’s IPO in June this year.
Black also outlined that his company was not shorting Tesla, despite continued interest from short-sellers. “We don’t short great companies that trade at expensive valuations,” the investor said.
Gary Black on UberIn the same thread, the investor was asked about his stake in ride-hailing giant Uber Technologies Inc. (NYSE:UBER). Black said that the Dara Khosrowshahi-led company “continues to outperform” Tesla.
He then shared an excerpt from a post the investor came across on his feed, which said that Tesla Bulls’ predictions about Uber’s “imminent demise” have been “flat out wrong” as the company continues to expand “autonomous partner initiatives.”
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
Photo courtesy: Rokas Tenys on Shutterstock.com
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With Tesla (TSLA -2.97%) having already released its estimate-busting delivery numbers for the quarter, investors were optimistic that the company would deliver other second-quarter numbers that were ahead of the Wall Street consensus estimates published on its investor relations page. Unfortunately, it did not, and the consternation around the miss is one reason the stock declined post-earnings.
Tesla misses earnings estimates Automotive deliveries of 480,126 in the quarter, compared to the consensus estimate for 406,024, contributed to revenue beating expectations. However, on every other headline metric, Tesla missed expectations, even with revenue coming in $652 million higher than modeled.
Both cost of goods sold (COGS) and operating expenses came in higher than expected, negatively affecting gross margin and operating margin, respectively.
Metric
Wall Street Consensus
Actual
Difference
Revenue
$27,584 million
$28,236 million
Better by $652 million
Gross profit
$5,378 million
$4,751 million
Worse by $627 million
Gross profit margin
19.5%
16.8%
Worse by 270 basis points
Operating profit
$1,503 million
$398 million
Worse by $1,105 million
Operating profit margin
5.4%
1.4%
Worse by 400 basis points
Data source: Tesla.
Why Tesla missed estimates The first point to note is that if Tesla had met analyst expectations for automotive revenue per delivery, then its revenue would have been higher. Based on the consensus automotive revenue estimate of $20.05 billion, and the delivery consensus, Tesla's automotive revenue per delivery would have been $49,376. Multiplying that by its delivery number produces $23.7 billion. Adding that to energy ($3.1 billion) and services ($4.6 billion) comes to $31.4 billion, compared with the actual number of $27.6 billion in the table.
Ultimately, the automotive revenue per delivery of $42,730 came in lower than expected because of a combination of discounting, incentives, relatively more sales to lower-priced markets, and a shift in models away from the higher-priced, and no longer produced, Model S and Model X, and toward lower-priced standard versions of the Model 3 and Model Y.
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Costs are rising Second, on the cost of goods sold, CFO Vaibhav Taneja cited rising commodity costs and interest rate changes: "... as interest rates have risen this year, the cost of subvention has risen along with them." In plain English, rising rates have made it more expensive for Tesla to offer promotional financing rates to customers.
Third, turning to rising operating expenses, Taneja cited increasing "research and development-related activities, including preproduction [ramp-up] costs for new products like the Semi truck, Optimus, Cybercab, and other AI initiatives, as well as the appreciation for an additional compute that we brought online." He also said operating expenses would "continue to grow in 2026 and beyond."
Image source: Tesla.
What it means to Tesla investors Having decided to go all in on production and capital spending for growth in 2026, the incentives that increased COGS make sense, as do the increased research and development costs to drive growth. The reality is Tesla wins when it delivers more vehicles and builds scale.
While the incentives and cost increases were more than many expected, they could have been forgiven if Tesla's robotaxi rollout had kept pace with the expectations CEO Elon Musk had previously outlined. If Tesla demonstrates better progress on that front, investors will be more accepting of increased costs and a less favorable sales mix.
Tesla (TSLA -2.97%) closed at $307.44 on Tuesday, about 3% above its 52-week low of $297.82. The electric car maker's shares have had a rough stretch, including a roughly 15% single-day drop following the company's second-quarter report last week.
A stock scraping along the bottom of its yearly range tends to scare investors off. But Tesla has traded down to these depths before -- three times in the past eight years, in fact. And each time, the investors who bought while the news was ugly ended up looking smart.
So it's worth walking through what actually happened the last three times Tesla's stock fell this far, and what's different about the current episode.
Image source: Tesla.
Three lows, three rebounds The first episode came in mid-2019. Tesla closed at a split-adjusted $11.93 on June 3 of that year, a multi-year low, as the company burned cash and skeptics questioned demand for its Model 3. Tesla was still losing money at the time. One year later, the stock had nearly quintupled, closing at $58.86 on June 3, 2020.
The second came in early 2023. After falling about 65% in 2022, Tesla closed at $108.10 on Jan. 3, 2023. Within days, the company cut prices across its lineup, and deliveries went on to hit records that year. Six months later, the stock had more than doubled to $279.82.
A year on from that January low, shares sat at $238.45, up about 120%.
The third came in April 2024. Tesla closed at $142.05 on April 22 that year, three weeks after reporting its first year-over-year decline in quarterly deliveries since 2020. To be fair, the recovery took longer this time. But it came. Twelve months later, shares had climbed about 68% to $237.97.
Notice what all three episodes have in common. Each time, the market's fear was about demand -- for the Model 3 in 2019, for electric vehicles in a shakier economy in 2023, and for an aging lineup in 2024. And each time, the company eventually produced a demand answer, whether through price cuts that filled its factories or the promise of cheaper models ahead.
Why this episode looks different That history is arguably the strongest case for buying Tesla near $300. But the current setup breaks the pattern in two ways.
First, demand isn't the problem this time. Tesla delivered 480,126 vehicles last quarter, a second-quarter record, and revenue climbed 26% from a year earlier to $28.2 billion. That was an acceleration from the first quarter's 16% growth.
The scare is about profit. Operating income fell 57% year over year to $398 million, leaving an operating margin of just 1.4% (down from 4.1% a year earlier). Adjusted earnings per share declined 18% to $0.33. And with capital expenditures reaching $5.8 billion for the quarter (more than twice the year-ago level) as Tesla pours money into AI (artificial intelligence) computing, its robotaxi service, and its Optimus robot program, free cash flow went negative.
Second, the price of admission is different. When Tesla bottomed in January 2023, the stock traded near 30 times its prior-year earnings. In 2019, the company had no earnings at all, but its market value was a small fraction of today's.
Now, even sitting 3% above its 52-week low, Tesla trades at about 285 times earnings.
Put another way, the stock is near a price low, but it's nowhere near a valuation low. The earlier recoveries began when returning growth met a beaten-down multiple. Today's multiple isn't beaten down. It already assumes the spending currently crushing margins will pay off in a big way.
Today's Change
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So, does history say Tesla stock is a buy at $307? Not quite. What history actually shows is that this stock has rewarded buyers when a demand scare met a reasonable price. Today's version offers neither. Demand is already strong, and the price still assumes years of success that hasn't arrived.
Of course, the pattern could go four for four. If operating profit inflects while the stock sits this low, the rebound could be dramatic, and it wouldn't be the first time Tesla made skeptics look silly.
But that's a bet on the spending paying off soon, not a bet on history repeating. Personally, I'll wait to see profits turn before buying this dip.
Tesla (TSLA), an electric-vehicle manufacturer developing autonomous-driving and energy products, fell approximately 1.5% to $302.94 in Wednesday's regular-sess
Think you're having a rough summer? At least you haven't lost $300 billion like Tesla (TSLA -0.89%) CEO Elon Musk.
Musk made history this year when his other mammoth company, Space Exploration Technologies, went public, pushing Musk's personal wealth to more than $1 trillion. He became the first -- and only -- trillionaire in recorded history.
But it didn't last. SpaceX stock has fallen below its initial public offering price, and Tesla is hemorrhaging value following the company's second-quarter earnings report. Even though Tesla reported strong revenue -- and posted more than $100 billion in trailing-12-month sales for the first time -- the stock fell by 18% in a single week after July 22 earnings, its worst one-week performance since 2022.
How extensive is Musk's loss? According to the Bloomberg Billionaires Index, his net worth is now $709 billion. Musk lost more money in the last six weeks than anyone else on the list even possesses. (No. 2 on the list is Larry Page, the co-founder of Alphabet, with a net worth of $281 billion.) Musk acknowledged this loss in a social media post on X, simply writing, "(Former) Trillionaire."
Let's see why the market has turned on Tesla stock despite its strong revenue growth.
Tesla CEO Elon Musk. Image source: The White House.
The red flags surrounding Tesla now Tesla's primary business is electric vehicles -- the company delivered 480,126 of them in the second quarter, up 25% from a year ago, and that resulted in most of Tesla's $28.23 billion revenue. Tesla said EV sales brought in $20.51 billion, up 23%.
The big problem, however, was Tesla's dwindling margins. Operating margins fell from 4.1% a year ago to just 1.4% in the second quarter of this year. Operating expenses jumped 47%, to $4.35 billion. Tesla reported negative free cash flow of $1.1 billion in the quarter, and its cash and investments dropped by $1.2 billion.
Capital expenditures more than doubled sequentially, according to CFO Vaibhav Taneja, and the company expects them to continue increasing in the second half of the year. Tesla issued guidance for $25 billion in capex spending for the year and announced plans to borrow up to $30 billion.
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The market reacts Undoubtedly, Tesla has huge plans that require enormous investment. Artificial intelligence is essential for Tesla's biggest bets, including self-driving technology and the Optimus robot line. The company is running early versions of its v15 autonomous driving software in robotaxis, but it's unclear when the technology will be ready for nationwide rollout -- or if regulators will sign off on it.
Meanwhile, Tesla is making room for Optimus robot production by discontinuing manufacturing lines at its Fremont, California, factory for Model S and X vehicles. Robots built on that line will be used for further training and development of the hardware and AI software, the company has said, but the technology appears to be a long way from commercial sales.
Tesla has always been priced for perfection, with a high forward price-to-earnings ratio that, even after a drop, still registers at an eye-watering 170. Investors have long been willing to buy and hold Tesla stock based on Musk's vision. But with dwindling margins, negative cash flow, doggedly high spending, and plans to borrow $30 billion, the shine appears to be coming off Tesla stock this summer.
Short sellers are nursing steep losses in 2026, down more than $200 billion collectively, yet many keep piling into one trade: betting against AI leaders, according to data from S3 Partners.
SPCX stock is down today. See the chart and price action here. Shorting Elon Musk “We’ve seen continued SPCX short selling since its inception,” S3 Partners managing director Ihor Dusaniwsky said.
The skepticism has persisted even as SpaceX secured fast-track inclusion on the Nasdaq 100 and other major indexes, a move that required Nasdaq, FTSE Russell and CRSP to adjust their rules ahead of the offering.
Two key catalysts are ahead: SpaceX reports quarterly earnings on Aug. 4, followed two days later by its first lockup expiry, when early pre-IPO shareholders become eligible to sell. The stock has already fallen nearly 15% from its listing price, and the lockup could inject fresh volatility.
Musk has pushed back hard against the bearish crowd. He warned on social media that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low.”
The comment echoes his long-running feud with Tesla shorts, including his 2018 warning that bears had “about three weeks before their short position explodes” and his 2024 claim that short holders “will be obliterated” once Tesla reaches full autonomy at scale, a jab he once aimed directly at Bill Gates.
Shorting the Hyperscalers The growing bearish bets add another layer of pressure on a sector already facing scrutiny over its massive AI spending.
Photo: Thrive Studios ID / Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Arete Wealth Advisors LLC trimmed its holdings in Tesla, Inc. (NASDAQ:TSLA – Free Report) by 17.1% in the 1st quarter, according to its most recent disclosure with the Securities & Exchange Commission. The institutional investor owned 23,600 shares of the electric vehicle producer’s stock after selling 4,865 shares during the period. Arete Wealth Advisors LLC’s holdings in Tesla were worth $8,769,000 as of its most recent SEC filing.
A number of other hedge funds and other institutional investors have also modified their holdings of TSLA. Vanguard Group Inc. increased its position in Tesla by 2.6% during the fourth quarter. Vanguard Group Inc. now owns 258,925,024 shares of the electric vehicle producer’s stock worth $116,443,762,000 after buying an additional 6,538,720 shares during the last quarter. State Street Corp boosted its stake in shares of Tesla by 0.9% during the 4th quarter. State Street Corp now owns 114,842,934 shares of the electric vehicle producer’s stock worth $51,647,164,000 after acquiring an additional 1,080,085 shares in the last quarter. Geode Capital Management LLC increased its holdings in shares of Tesla by 0.6% during the 4th quarter. Geode Capital Management LLC now owns 65,700,975 shares of the electric vehicle producer’s stock valued at $29,426,070,000 after acquiring an additional 375,946 shares during the last quarter. Norges Bank bought a new position in shares of Tesla in the 4th quarter valued at approximately $17,128,100,000. Finally, Amundi lifted its holdings in Tesla by 14.0% in the 1st quarter. Amundi now owns 22,174,884 shares of the electric vehicle producer’s stock worth $8,243,513,000 after purchasing an additional 2,727,141 shares during the last quarter. Institutional investors own 66.20% of the company’s stock.
Tesla Stock Performance NASDAQ:TSLA opened at $307.44 on Wednesday. The firm’s 50-day moving average is $396.79 and its 200-day moving average is $400.44. Tesla, Inc. has a 52-week low of $297.82 and a 52-week high of $498.83. The company has a debt-to-equity ratio of 0.09, a quick ratio of 1.55 and a current ratio of 1.94. The company has a market cap of $1.21 trillion, a price-to-earnings ratio of 284.67, a PEG ratio of 15.80 and a beta of 1.80.
Tesla (NASDAQ:TSLA – Get Free Report) last released its earnings results on Wednesday, July 22nd. The electric vehicle producer reported $0.33 earnings per share for the quarter, missing the consensus estimate of $0.50 by ($0.17). Tesla had a net margin of 3.67% and a return on equity of 3.82%. The company had revenue of $28.24 billion during the quarter, compared to the consensus estimate of $26.42 billion. During the same quarter in the previous year, the business posted $0.33 EPS. The firm’s quarterly revenue was up 25.5% on a year-over-year basis. Equities research analysts anticipate that Tesla, Inc. will post 0.9 earnings per share for the current year.
Key Headlines Impacting Tesla Here are the key news stories impacting Tesla this week:
Positive Sentiment: Tesla won permission to revive a U.K. lawsuit involving InterDigital and a patent-licensing platform. The case could help Tesla secure licensing terms for connected vehicles using 5G technology, although it is not a final legal victory. Tesla wins bid to revive UK lawsuit for 5G patents licence Positive Sentiment: Long-term power-purchase agreements in Arizona and Texas should provide Tesla with additional renewable electricity and battery capacity, supporting its energy-storage and AI infrastructure ambitions. Tesla to buy power from Arizona solar project Positive Sentiment: Some analysts remain highly bullish: Wedbush reiterated a $600 target based on potential growth from full self-driving, Optimus and other AI businesses, while ARK Invest continued buying Tesla shares during the selloff. These views provide support but depend on substantial future execution. Wedbush issues $600 Tesla price target Neutral Sentiment: Technical commentary says TSLA is deeply oversold after its extended decline, creating the possibility of a short-term rebound. However, oversold conditions do not resolve the company’s fundamental profitability and execution concerns. Tesla turns most oversold in over a year Negative Sentiment: Tesla’s quarterly revenue exceeded expectations, but adjusted EPS was $0.33 versus a $0.50 consensus estimate. Operating income fell 57% to roughly $400 million, while capital expenditures surged 142% year over year and free cash flow turned negative. The combination of weaker margins and heavier spending is the primary reason for the post-earnings selloff. Negative Sentiment: Reports say Tesla delayed a major growth timeline, intensifying concerns that robotaxis, humanoid robots and AI-related businesses may take longer to commercialize. Elon Musk has acknowledged “substantial” challenges, weakening confidence in the near-term growth narrative. Tesla delays biggest growth story Negative Sentiment: Investors also face intense EV competition, including BYD’s improving performance and planned humanoid-robot launch. With Tesla still trading at a very high earnings multiple despite deteriorating automotive profitability, analysts warn that the stock leaves little room for execution mistakes. Wall Street Analysts Forecast Growth Several brokerages have commented on TSLA. Cantor Fitzgerald reiterated an “overweight” rating and set a $485.00 price target (down from $510.00) on shares of Tesla in a report on Thursday, July 23rd. Morgan Stanley decreased their price objective on shares of Tesla from $417.00 to $400.00 and set an “equal weight” rating for the company in a report on Thursday, July 23rd. Evercore raised shares of Tesla from a “hold” rating to an “outperform” rating in a research report on Friday, June 5th. JPMorgan Chase & Co. lowered their price target on Tesla from $475.00 to $445.00 and set a “neutral” rating on the stock in a research report on Thursday, July 23rd. Finally, Citigroup initiated coverage on Tesla in a research note on Thursday, July 9th. They issued a “market perform” rating on the stock. One equities research analyst has rated the stock with a Strong Buy rating, twenty-one have issued a Buy rating, nineteen have issued a Hold rating and four have assigned a Sell rating to the company. Based on data from MarketBeat.com, the company currently has an average rating of “Hold” and a consensus target price of $402.24.
Get Our Latest Report on TSLA
Insider Buying and Selling In related news, CFO Vaibhav Taneja sold 2,606 shares of the company’s stock in a transaction on Monday, June 8th. The stock was sold at an average price of $402.20, for a total value of $1,048,133.20. Following the completion of the transaction, the chief financial officer directly owned 22,039 shares in the company, valued at approximately $8,864,085.80. This represents a 10.57% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Kathleen Wilson-Thompson sold 26,409 shares of the stock in a transaction on Thursday, April 30th. The shares were sold at an average price of $378.11, for a total transaction of $9,985,506.99. Following the completion of the transaction, the director owned 48,399 shares of the company’s stock, valued at approximately $18,300,145.89. This represents a 35.30% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 32,015 shares of company stock valued at $12,383,640 in the last quarter. Corporate insiders own 19.90% of the company’s stock.
Tesla Company Profile (Free Report)
Tesla, Inc (NASDAQ: TSLA) is an American company that designs, manufactures and sells electric vehicles, energy generation and energy storage products. Founded in 2003 by Martin Eberhard and Marc Tarpenning, Tesla grew into a vertically integrated mobility and clean‑energy company with Elon Musk serving as its chief executive officer. The company’s stated mission is to accelerate the world’s transition to sustainable energy, reflected in its combined focus on electric drivetrains, battery technology, renewable energy products and software.
Tesla’s automotive business includes a lineup of battery‑electric vehicles and related services.
Read More Five stocks we like better than Tesla These 3 Stocks Have Soared in 2026—Can They Keep Climbing? Hasbro’s Earnings Beat Shows Why This Is No Longer Just a Toy Story Rambus: Another AI Phoenix Ready to Rise From the Ashes of Correction Chips & Clips: Memory Tariffs Rewire Tech Supply Chains Want to see what other hedge funds are holding TSLA? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Tesla, Inc. (NASDAQ:TSLA – Free Report).
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Atreides Management LP grew its position in Tesla, Inc. (NASDAQ:TSLA – Free Report) by 7.9% in the first quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The institutional investor owned 200,795 shares of the electric vehicle producer’s stock after buying an additional 14,760 shares during the quarter. Tesla accounts for 1.5% of Atreides Management LP’s holdings, making the stock its 21st largest holding. Atreides Management LP’s holdings in Tesla were worth $74,646,000 at the end of the most recent reporting period.
A number of other hedge funds and other institutional investors also recently bought and sold shares of TSLA. Networth Advisors LLC acquired a new stake in shares of Tesla during the fourth quarter worth about $26,000. Chapman Financial Group LLC purchased a new stake in Tesla during the 2nd quarter worth approximately $26,000. Davidson Capital Management Inc. lifted its holdings in Tesla by 79.4% during the 4th quarter. Davidson Capital Management Inc. now owns 61 shares of the electric vehicle producer’s stock worth $27,000 after buying an additional 27 shares in the last quarter. Friedenthal Financial boosted its position in Tesla by 66.7% in the 1st quarter. Friedenthal Financial now owns 75 shares of the electric vehicle producer’s stock valued at $28,000 after buying an additional 30 shares during the period. Finally, Prism Advisors Inc. acquired a new position in shares of Tesla in the fourth quarter worth $30,000. 66.20% of the stock is currently owned by hedge funds and other institutional investors.
Key Headlines Impacting Tesla Here are the key news stories impacting Tesla this week:
Positive Sentiment: Tesla won permission to revive a U.K. lawsuit involving InterDigital and a patent-licensing platform. The case could help Tesla secure licensing terms for connected vehicles using 5G technology, although it is not a final legal victory. Tesla wins bid to revive UK lawsuit for 5G patents licence Positive Sentiment: Long-term power-purchase agreements in Arizona and Texas should provide Tesla with additional renewable electricity and battery capacity, supporting its energy-storage and AI infrastructure ambitions. Tesla to buy power from Arizona solar project Positive Sentiment: Some analysts remain highly bullish: Wedbush reiterated a $600 target based on potential growth from full self-driving, Optimus and other AI businesses, while ARK Invest continued buying Tesla shares during the selloff. These views provide support but depend on substantial future execution. Wedbush issues $600 Tesla price target Neutral Sentiment: Technical commentary says TSLA is deeply oversold after its extended decline, creating the possibility of a short-term rebound. However, oversold conditions do not resolve the company’s fundamental profitability and execution concerns. Tesla turns most oversold in over a year Negative Sentiment: Tesla’s quarterly revenue exceeded expectations, but adjusted EPS was $0.33 versus a $0.50 consensus estimate. Operating income fell 57% to roughly $400 million, while capital expenditures surged 142% year over year and free cash flow turned negative. The combination of weaker margins and heavier spending is the primary reason for the post-earnings selloff. Negative Sentiment: Reports say Tesla delayed a major growth timeline, intensifying concerns that robotaxis, humanoid robots and AI-related businesses may take longer to commercialize. Elon Musk has acknowledged “substantial” challenges, weakening confidence in the near-term growth narrative. Tesla delays biggest growth story Negative Sentiment: Investors also face intense EV competition, including BYD’s improving performance and planned humanoid-robot launch. With Tesla still trading at a very high earnings multiple despite deteriorating automotive profitability, analysts warn that the stock leaves little room for execution mistakes. Wall Street Analysts Forecast Growth Several analysts have recently issued reports on TSLA shares. HSBC reiterated a “hold” rating on shares of Tesla in a research note on Monday, June 15th. Royal Bank Of Canada restated an “outperform” rating and set a $500.00 price target on shares of Tesla in a report on Tuesday. Citizens Jmp started coverage on Tesla in a research report on Thursday, July 9th. They issued a “market perform” rating on the stock. Erste Group Bank upgraded Tesla from a “sell” rating to a “hold” rating in a research note on Friday, June 5th. Finally, Glj Research restated a “sell” rating on shares of Tesla in a research note on Tuesday, July 21st. One analyst has rated the stock with a Strong Buy rating, twenty-one have given a Buy rating, nineteen have assigned a Hold rating and four have assigned a Sell rating to the stock. Based on data from MarketBeat, Tesla has an average rating of “Hold” and a consensus target price of $402.24.
View Our Latest Research Report on TSLA
Tesla Price Performance Shares of NASDAQ TSLA opened at $307.44 on Wednesday. The stock’s 50-day simple moving average is $396.79 and its 200-day simple moving average is $400.44. The firm has a market capitalization of $1.21 trillion, a PE ratio of 284.67, a price-to-earnings-growth ratio of 15.80 and a beta of 1.80. Tesla, Inc. has a fifty-two week low of $297.82 and a fifty-two week high of $498.83. The company has a debt-to-equity ratio of 0.09, a quick ratio of 1.55 and a current ratio of 1.94.
Tesla (NASDAQ:TSLA – Get Free Report) last announced its quarterly earnings results on Wednesday, July 22nd. The electric vehicle producer reported $0.33 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.50 by ($0.17). The business had revenue of $28.24 billion during the quarter, compared to analyst estimates of $26.42 billion. Tesla had a net margin of 3.67% and a return on equity of 3.82%. The business’s revenue for the quarter was up 25.5% compared to the same quarter last year. During the same period last year, the company earned $0.33 earnings per share. As a group, equities research analysts forecast that Tesla, Inc. will post 0.9 EPS for the current fiscal year.
Insider Buying and Selling at Tesla In other news, Director Kathleen Wilson-Thompson sold 26,409 shares of the company’s stock in a transaction on Thursday, April 30th. The shares were sold at an average price of $378.11, for a total value of $9,985,506.99. Following the completion of the transaction, the director owned 48,399 shares in the company, valued at approximately $18,300,145.89. This represents a 35.30% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Vaibhav Taneja sold 3,000 shares of Tesla stock in a transaction on Wednesday, May 13th. The stock was sold at an average price of $450.00, for a total transaction of $1,350,000.00. Following the sale, the chief financial officer owned 18,106 shares in the company, valued at $8,147,700. This represents a 14.21% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last 90 days, insiders sold 32,015 shares of company stock valued at $12,383,640. Company insiders own 19.90% of the company’s stock.
About Tesla (Free Report)
Tesla, Inc (NASDAQ: TSLA) is an American company that designs, manufactures and sells electric vehicles, energy generation and energy storage products. Founded in 2003 by Martin Eberhard and Marc Tarpenning, Tesla grew into a vertically integrated mobility and clean‑energy company with Elon Musk serving as its chief executive officer. The company’s stated mission is to accelerate the world’s transition to sustainable energy, reflected in its combined focus on electric drivetrains, battery technology, renewable energy products and software.
Tesla’s automotive business includes a lineup of battery‑electric vehicles and related services.
Recommended Stories Five stocks we like better than Tesla These 3 Stocks Have Soared in 2026—Can They Keep Climbing? Hasbro’s Earnings Beat Shows Why This Is No Longer Just a Toy Story Rambus: Another AI Phoenix Ready to Rise From the Ashes of Correction Chips & Clips: Memory Tariffs Rewire Tech Supply Chains
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of TSLA, SPCX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Tesla shorts are sitting on nearly $9.1 billion in mark-to-market profits this year, making it the most profitable short trade so far this year. SpaceX now ranks as the second-most-profitable short trade on the market, S3 Partners said, per the New York Times.
SpaceX Faces Stock Pressure Despite Ark BuyingSpaceX’s stock has been under pressure, even as Cathie Wood‘s Ark Invest continues to buy shares. On Monday, Ark purchased $14.1 million worth of SpaceX stock, maintaining its investment strategy despite the stock’s decline.
The pressure on SpaceX shares comes as the market anticipates a potential increase in share supply with the upcoming lock-up expiration on Aug. 6, when up to 911.5 million shares could become eligible for trading.
Ark Invest Increases Stake in SpaceX and TeslaArk Invest’s confidence in SpaceX and Tesla remains strong. On Tuesday, the firm added $12.2 million worth of SpaceX shares and $12.4 million of Tesla shares across several ETFs.
This move comes amid ongoing market debates surrounding growth valuations and long-term strategies for both companies. Ark’s continued investment in these stocks signals its belief in their potential despite current market challenges.
Image: Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Market News and Data brought to you by Benzinga APIs
Amundi lifted its holdings in shares of Tesla, Inc. (NASDAQ:TSLA – Free Report) by 14.0% in the 1st quarter, according to its most recent filing with the Securities and Exchange Commission. The firm owned 22,174,884 shares of the electric vehicle producer’s stock after acquiring an additional 2,727,141 shares during the quarter. Tesla makes up about 2.2% of Amundi’s portfolio, making the stock its 7th biggest holding. Amundi owned 0.59% of Tesla worth $8,243,513,000 at the end of the most recent quarter.
A number of other large investors have also added to or reduced their stakes in TSLA. Crestwood Advisors Group LLC boosted its position in shares of Tesla by 34.7% during the 4th quarter. Crestwood Advisors Group LLC now owns 19,567 shares of the electric vehicle producer’s stock worth $8,799,000 after acquiring an additional 5,039 shares in the last quarter. Calamos Wealth Management LLC raised its position in Tesla by 5.9% during the fourth quarter. Calamos Wealth Management LLC now owns 41,907 shares of the electric vehicle producer’s stock valued at $18,846,000 after purchasing an additional 2,341 shares in the last quarter. Private Capital Advisors Inc. raised its position in Tesla by 139.3% during the fourth quarter. Private Capital Advisors Inc. now owns 21,331 shares of the electric vehicle producer’s stock valued at $9,593,000 after purchasing an additional 12,417 shares in the last quarter. Wealthquest Corp acquired a new stake in shares of Tesla in the 4th quarter valued at $1,035,000. Finally, Knights of Columbus Asset Advisors LLC boosted its holdings in shares of Tesla by 34.8% in the 4th quarter. Knights of Columbus Asset Advisors LLC now owns 64,481 shares of the electric vehicle producer’s stock valued at $28,998,000 after purchasing an additional 16,652 shares in the last quarter. Institutional investors own 66.20% of the company’s stock.
Tesla Stock Performance Shares of Tesla stock opened at $307.44 on Wednesday. The stock has a market cap of $1.21 trillion, a price-to-earnings ratio of 284.67, a P/E/G ratio of 15.80 and a beta of 1.80. Tesla, Inc. has a twelve month low of $297.82 and a twelve month high of $498.83. The company’s fifty day moving average is $396.79 and its 200 day moving average is $400.44. The company has a quick ratio of 1.55, a current ratio of 1.94 and a debt-to-equity ratio of 0.09.
Tesla (NASDAQ:TSLA – Get Free Report) last announced its earnings results on Wednesday, July 22nd. The electric vehicle producer reported $0.33 EPS for the quarter, missing the consensus estimate of $0.50 by ($0.17). Tesla had a return on equity of 3.82% and a net margin of 3.67%.The company had revenue of $28.24 billion for the quarter, compared to analyst estimates of $26.42 billion. During the same period in the previous year, the firm posted $0.33 earnings per share. The firm’s quarterly revenue was up 25.5% compared to the same quarter last year. Sell-side analysts forecast that Tesla, Inc. will post 0.9 EPS for the current year.
Key Stories Impacting Tesla Here are the key news stories impacting Tesla this week:
Positive Sentiment: Tesla won permission to revive a U.K. lawsuit involving InterDigital and a patent-licensing platform. The case could help Tesla secure licensing terms for connected vehicles using 5G technology, although it is not a final legal victory. Tesla wins bid to revive UK lawsuit for 5G patents licence Positive Sentiment: Long-term power-purchase agreements in Arizona and Texas should provide Tesla with additional renewable electricity and battery capacity, supporting its energy-storage and AI infrastructure ambitions. Tesla to buy power from Arizona solar project Positive Sentiment: Some analysts remain highly bullish: Wedbush reiterated a $600 target based on potential growth from full self-driving, Optimus and other AI businesses, while ARK Invest continued buying Tesla shares during the selloff. These views provide support but depend on substantial future execution. Wedbush issues $600 Tesla price target Neutral Sentiment: Technical commentary says TSLA is deeply oversold after its extended decline, creating the possibility of a short-term rebound. However, oversold conditions do not resolve the company’s fundamental profitability and execution concerns. Tesla turns most oversold in over a year Negative Sentiment: Tesla’s quarterly revenue exceeded expectations, but adjusted EPS was $0.33 versus a $0.50 consensus estimate. Operating income fell 57% to roughly $400 million, while capital expenditures surged 142% year over year and free cash flow turned negative. The combination of weaker margins and heavier spending is the primary reason for the post-earnings selloff. Negative Sentiment: Reports say Tesla delayed a major growth timeline, intensifying concerns that robotaxis, humanoid robots and AI-related businesses may take longer to commercialize. Elon Musk has acknowledged “substantial” challenges, weakening confidence in the near-term growth narrative. Tesla delays biggest growth story Negative Sentiment: Investors also face intense EV competition, including BYD’s improving performance and planned humanoid-robot launch. With Tesla still trading at a very high earnings multiple despite deteriorating automotive profitability, analysts warn that the stock leaves little room for execution mistakes. Insider Activity at Tesla In other news, Director Kathleen Wilson-Thompson sold 26,409 shares of the business’s stock in a transaction that occurred on Thursday, April 30th. The shares were sold at an average price of $378.11, for a total value of $9,985,506.99. Following the transaction, the director owned 48,399 shares in the company, valued at approximately $18,300,145.89. The trade was a 35.30% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Vaibhav Taneja sold 2,606 shares of the company’s stock in a transaction on Monday, June 8th. The shares were sold at an average price of $402.20, for a total transaction of $1,048,133.20. Following the completion of the sale, the chief financial officer directly owned 22,039 shares in the company, valued at approximately $8,864,085.80. This represents a 10.57% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 32,015 shares of company stock worth $12,383,640 over the last quarter. 19.90% of the stock is currently owned by company insiders.
Analyst Ratings Changes TSLA has been the subject of a number of research analyst reports. Evercore raised Tesla from a “hold” rating to an “outperform” rating in a report on Friday, June 5th. Royal Bank Of Canada reiterated an “outperform” rating and issued a $500.00 target price on shares of Tesla in a research report on Tuesday. Roth Capital reissued a “buy” rating and issued a $505.00 target price on shares of Tesla in a report on Thursday, July 23rd. TD Cowen reaffirmed a “buy” rating and set a $460.00 price target (down from $490.00) on shares of Tesla in a report on Thursday, July 23rd. Finally, JPMorgan Chase & Co. dropped their price objective on shares of Tesla from $475.00 to $445.00 and set a “neutral” rating for the company in a research note on Thursday, July 23rd. One equities research analyst has rated the stock with a Strong Buy rating, twenty-one have assigned a Buy rating, nineteen have assigned a Hold rating and four have given a Sell rating to the stock. According to data from MarketBeat, the company has an average rating of “Hold” and a consensus price target of $402.24.
Read Our Latest Stock Report on TSLA
Tesla Company Profile (Free Report)
Tesla, Inc (NASDAQ: TSLA) is an American company that designs, manufactures and sells electric vehicles, energy generation and energy storage products. Founded in 2003 by Martin Eberhard and Marc Tarpenning, Tesla grew into a vertically integrated mobility and clean‑energy company with Elon Musk serving as its chief executive officer. The company’s stated mission is to accelerate the world’s transition to sustainable energy, reflected in its combined focus on electric drivetrains, battery technology, renewable energy products and software.
Tesla’s automotive business includes a lineup of battery‑electric vehicles and related services.
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The shares dropped for five consecutive days, including a four-day losing streak since the car maker reported weaker-than-expected second-quarter earnings.
On Tesla's (TSLA -0.77%) first-quarter earnings call on April 22, CEO Elon Musk told investors, "I think Optimus will be our biggest product, not just Tesla's biggest product ever, but probably the biggest product ever."
He repeated that claim on the company's latest earnings call and separately floated a figure of up to $10 trillion in long-term sales for the project.
So how close are we to Musk's vision of a robot in every home?
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Optimus is Tesla's humanoid robot, targeted to eventually sell at a price point similar to a car's. The project is so important to Tesla that it now describes itself as transitioning into a "physical AI company," and it is putting its money where its mouth is: the Model S and Model X production lines in Fremont, California, have been decommissioned to make way for Optimus production.
A second site at Gigafactory Texas is being prepared with a purported eventual capacity of 10 million units annually.
Production delays push Musk's robot timeline further out In January 2025, Musk said of that year's Optimus output: "Will we succeed in making several thousand? Yes, I think we will." He said that he was confident they'd be doing useful things by the end of the year.
That didn't come to pass, and a year later, in the company's Q1 call, Musk acknowledged the production timeline had been pushed out, saying the first robots off the Fremont line will come "later this year."
So, while possibly hundreds of Optimus prototypes have been built, the count on the official production line remains zero.
Image source: Getty Images.
And it's important to note that the first robots off the Fremont line are not destined for customers. Instead, at this point, they're headed for an internal program called "Optimus Academy." They are still very much in the research and development phase, not the commercial deployment phase.
The costs are piling up The bill, though, is arriving now: second-quarter capital expenditures (capex) hit $5.79 billion, up 142% from a year ago. That pushed free cash flow (FCF) -- the cash left over after running the business and paying for that capex -- into the red. The company reported a negative $1.09 billion.
Tesla reaffirmed capex guidance of more than $25 billion for 2026, with FCF expected to stay negative for the full year.
While there is a possibly enormous opportunity here, I think the pattern we've seen of development and production delays will continue. The risks far outweigh the benefits in my view, and although it's fallen hard, Tesla stock is still overvalued.
Cathie Wood's Ark Invest bought more than 160,000 shares in Tesla (TSLA -0.58%) after the recent results release and the following share price slump. The acquired shares are worth about $50.1 million at the time of writing. Is it a move worth following?
Why Ark Invest bought more stock The move made logical sense for Ark. The company has long championed the bullish case for Tesla, and Tesla's expected 2029 price is $2,600 per share. If Tesla continues to hold that opinion, and an underlying belief in the robotaxi rollout that drives its model (Ark assumes 88% of Tesla's enterprise value in 2029 will come from robotaxi), then the dip is an opportunity to buy more.
Clearly, Ark isn't put off by Tesla's failure to meet the expectations CEO Elon Musk previously set for the robotaxi rollout.
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Why Tesla's robotaxi rollout isn't meeting expectations In April 2025, Musk predicted there would be "millions of Teslas operating autonomously" in the second half of 2026. In July 2025, he told investors Tesla would "probably" have autonomous ride-hailing covering half the U.S. population by the end of 2025. In October 2025, he promised robotaxis in "about 8 to 10 metro areas by the end of the year." In January, Musk said the robotaxi fleet "will probably double every month, type of thing."
These aims weren't met.
Expectations matter This matters for three reasons. First, investors do buy stocks and pencil in valuation scenarios based on management's pronouncements.
Ark Invest CEO Cathie Wood. Image source: Getty Images.
Second, Tesla's internal plans, including capital spending ramps, are presumably based on these assumptions. Third, every time expectations for robotaxi expansion and, ultimately, cash flow from ride-share revenue are pushed back, investors and analysts should lower valuation expectations, as cash flow later has lower value than cash flow upfront.
What Tesla said about the robotaxi rollout Management began articulating a more cautious take on the rollout in April, with Musk outlining that Tesla would make architectural improvements to safety before implementing robotaxi on a "large scale." This implies the validation and release of the next major version of full self-driving (FSD) software, v15. Given that Musk doesn't expect that to happen before the end of the year or early 2027, it should have been clear that a massive robotaxi scaling won't occur until 2027 at the earliest.
Unfortunately, that reality didn't appear to hit home with many investors at the time. On the recent earnings call, management's comments made it clear that achieving safety and reliability came first. CFO Vaibhav Taneja said: "There are things not just on the software front, on the operation front, which we're also trying to tackle," so it's not just about v15 FSD. Musk noted that achieving an ultra-high level of reliability is "the only thing really constraining our growth in robotaxi."
Is Tesla stock a buy? Ark probably took heart from Tesla's head of AI, Ashok Elluswamy, who said that Tesla's robotaxis are already running on early versions of v15, and that 40% of the seven major improvement tracks planned for v15 are currently working together. Moreover, the number of unsupervised miles driven is growing at a double-digit rate, even if the fleet and location expansion aren't.
These are very positive developments that are being ignored by a market that's finally realized there will be no massive robotaxi rollout in 2026. The latter won't disappoint Ark too much, as there's a huge margin of safety for a delayed rollout between the current price of $313 and its expected value of $2,600 in 2029.
Ultimately, if you share Ark's enthusiasm, the stock is a buy. However, anyone buying it needs to be aware that until Tesla releases v15 and starts exponential scaling in fleet and miles, question marks will hang over it.
Tesla (TSLA -0.77%) released its second-quarter update on July 22. The company's deliveries increased by a healthy 25% year over year to 480,126, the best year-over-year growth it had registered in nearly two years. Tesla's revenue came in at $28.2 billion, 26% higher than the year-ago period.
However, Tesla's earnings per share dropped 3% year over year to $0.32, as the company's decision to invest in several ongoing projects, including humanoid robots and robotaxis, compressed profits and margins. Tesla is no longer just an electric vehicle (EV) maker. Could the company make enough headway in other markets over the next five years to significantly improve the business?
Image source: The Motley Fool.
The bull thesis Tesla first launched its robotaxi service in Austin in 2025. The company has ramped things up since. Tesla's robotaxis are now available in several cities across Texas and Florida. Over the next five years, the company could build a large fleet in most major U.S. cities and start generating meaningful revenue from ride fees. An expanding ecosystem of driverless cars on the road will also help it improve its self-driving software, thanks to the real-world data these vehicles will collect, which will help it train its software.
Tesla's robotaxi business may boost the company's profits and margins. The company could also develop much more capable versions of its Optimus humanoid robots. If these robots can achieve a level where they can perform many tasks just as well -- if not better -- than humans, they could experience strong demand and potentially transform the labor market. Tesla would reap significant financial benefits from that. In the meantime, the EV maker could remain the top player in the market where it made its name.
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Read the fine print Tesla could run into several obstacles. Let's consider three. First, the company's rollout of its robotaxi service may not be as fast as it expects. In fact, based on the projections Elon Musk had previously made, the company is far behind where it should be at this point. It could also encounter regulatory delays and competition, especially from Waymo, whose existing fleet of fully autonomous robotaxis is bigger than Tesla's.
Second, Tesla's humanoid robot project may also encounter obstacles. It could fail to impress investors, as it has in the past, and never reach the kind of versatility Tesla needs to support the demand that would make this project profitable. Lastly, with increased competition in the EV industry -- and new models flooding the market worldwide -- even Tesla's core business may not perform well over the next five years. The bottom line is that Tesla is a risky stock. It could certainly soar through 2031, provided the company can get close to achieving its goals, but Tesla may also be a wealth destroyer over this period. Investors should only buy the company's shares if they are comfortable with the volatility.
Tesla (TSLA) shareholders could own 54% of a combined Tesla-SpaceX company under a hypothetical merger valued at roughly $3.31 trillion, according to RBC Capita
Tesla (TSLA) received a lower price target from RBC Capital Markets as the firm adjusted its outlook for the company's robotaxi opportunity while maintaining a
SummaryTesla, Inc. reported record Q2 deliveries and revenue, but margins collapsed and free cash flow turned negative for the first time in two years.TSLA plans over $25 billion in CapEx this year and is pursuing up to $30 billion in debt capacity, signaling a major shift in funding strategy.Competitive pressures are intensifying in Europe, China, and the U.S., while recent demand was likely boosted by temporary geopolitical factors.My updated DCF model yields a fair value of $91.95 per TSLA share—about 70% below current levels—supporting a bearish stance despite some positive demand signals. jetcityimage/iStock Editorial via Getty Images
A month ago, I argued that Tesla, Inc. (TSLA) had become one of the biggest disconnects between price and fundamentals that the market has ever produced. Since that time, the shares have declined by ~27%. After
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At $309.22, Tesla (NASDAQ:TSLA | TSLA Price Prediction) screens as fairly valued with a neutral risk/reward. The stock has shed roughly a third of its value since New Year’s, yet still trades at a valuation that assumes flawless execution on Robotaxi, Optimus, and an AI stack currently torching free cash flow.
Tesla is a vertically integrated EV manufacturer with a fast-growing energy storage business and an ambitious AI and robotics roadmap. Q2 was the split-screen quarter that broke consensus: record deliveries of 480,126 vehicles and $28.24 billion in revenue, up 25.5% year over year, alongside operating margins compressed to 1.4% and free cash flow of negative $1.09 billion. The stock fell 18.5% from the filing price of $379.50 to today’s level.
Why the Growth Story Still Has Legs Bulls point to a company reaccelerating on the top line while compounding software attach. Active FSD subscriptions hit 1.48 million, up 56% year over year, and energy storage deployments rose to 13.5 GWh. Services and Other revenue grew 50% year over year at a record 14.1% gross margin.
Ashok Elluswamy told investors the Robotaxi fleet has driven “more than 380,000 miles of unsupervised robotaxi now across six cities in two different states” with zero notable incidents, growing at “more than 10% a week in terms of miles driven.”. With Cybercab, Semi, Megapack 3, and Optimus all targeting 2026 volume production, and $43.5 billion in cash on the balance sheet, funding risk on that roadmap is minimal.
Where the Bear Case Bites Bears see a hardware company in margin freefall priced as an AI monopoly. Non-GAAP EPS of $0.33 missed the $0.5367 consensus by 38.51%, operating income fell 56.9%, and operating expenses jumped 47% to $4.35 billion on AI infrastructure and CEO-award stock compensation.
Valuation is the accelerant. Tesla trades at 285x trailing earnings, 156x forward earnings, and 100x EV/EBITDA. Polymarket traders assign only a 15% probability that Optimus meaningfully ships this year, and composite prediction-market sentiment sits at a neutral-bearish 41.98.
Why Patience Looks Like the Rational Trade The facts sit between the extremes. Revenue is accelerating, but net income is shrinking 3% year over year. Robotaxi miles are compounding, but capex of $5.79 billion is the reason cash flow inverted. This is a company mid-transition, spending today to monetize an AI and autonomy thesis that traders explicitly doubt on near-term timelines.
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A more constructive stance would require evidence that Optimus and Cybercab economics are real, or that automotive margins have bottomed. A more negative stance would require a demand crack in core auto or a durable break in the AI capex return story. Neither is visible in the current quarter.
What the Numbers Actually Say Tesla trades at $309.22 against an analyst consensus target of $401.07 drawn from 47 analysts, implying roughly 30% upside if consensus is right. The rating breakdown skews mixed:
Strong Buy: 5 Buy: 18 Hold: 18 Sell: 4 Strong Sell: 2 Shares are down 31.24% year to date and 18.56% over the past month. Over the same post-earnings window that Tesla fell 18.5%, the S&P 500 tracker moved from $738.18 to $739.09, essentially flat. This is a Tesla-specific reset.
Why $309 Reflects a Balanced Setup At $309, the risk/reward looks balanced.
Stripping away both narratives, the realistic base case prices Tesla as a maturing EV OEM whose automotive margin compression is partially cushioned by a hyper-scaling energy storage division, while AI capex caps free cash flow. Fair fundamental base-case value sits between $210 and $240, assuming a forward multiple near 45x to 50x on normalized earnings. That puts today’s $309 above intrinsic value but well below the level a confirmed Robotaxi or Optimus ramp would justify.
The catalysts that would tip the analytical picture are specific and datable. A constructive catalyst would be a full-year print showing automotive gross margin re-expansion above 20% alongside a measurable Robotaxi revenue line. A negative catalyst would be another quarter of negative free cash flow paired with a delivery decline or a slip on 2026 production timelines for Cybercab, Semi, or Megapack 3.
The cost of patience is missing an early leg of a Robotaxi rerating. The cost of acting prematurely is paying 156x forward earnings for an execution story the market is already discounting. At $309, the fundamental case supports a lower price and the narrative case supports a higher one, and neither side has this quarter’s data on its side.
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Tesla (NASDAQ:TSLA | TSLA Price Prediction) currently trades at $309.22 against a consensus analyst price target of $401.07, but Wedbush’s Dan Ives issued a $600 call that implies roughly 94% upside from here.
The target assumes Tesla successfully executes a hardware-to-software multiplier, selling vehicles at near-cost to lock in an active base for recurring, high-margin AI, mobility, and robotics subscriptions. Under that premise, the math works. The question is whether the last quarter made it more or less believable.
Wall Street is paying attention because the stock has been cut in half from its year-to-date starting point, even as revenue keeps growing at more than 25% annually.
An Earnings Miss That Blew Up the Margin Story Q2 2026 earnings triggered the drop. Tesla reported revenue of $28.24 billion, up 25.5% year over year and beating consensus by 7.10%, but non-GAAP EPS came in at $0.33 versus a $0.54 estimate, missing by 38.51%. Operating margin collapsed to 1.4%, operating income fell 56.88% year over year, and free cash flow turned to negative $1.09 billion as capex surged 141.8%.
Shares dropped 16.33% in the past week and 18.56% over the past month. The selloff is Tesla-specific rather than sector-wide, driven by fear that $25 billion capital budget is destroying near-term profitability faster than the AI, robotaxi, and Optimus story is being monetized.
Why Analysts Are Looking Past the Quarter Bulls anchor on the same lines that hurt the P&L. Services revenue grew 50% year over year, active FSD subscriptions hit 1.48 million, up 56%, and FSD attach rate on new North American deliveries topped 55%. Robotaxi is running in seven US metros, with VP of AI Ashok Elluswamy telling investors the fleet has driven “more than 380,000 miles of unsupervised robotaxi” with “zero notable incidents”, growing at “more than 10% a week”.
Wedbush’s $600 case rests on Optimus, Cybercab, and FSD reaching subscription scale in 2027 and 2028. Elon Musk called Optimus “the biggest product ever”, with aspirational output of 1 million units a year from the third-generation robot and 10 million from the fourth. If those recurring streams materialize with software-like margins, near-cost hardware supports the target.
Of 47 analysts, 5 rate the stock Strong Buy, 18 Buy, 18 Hold, 4 Sell, and 2 Strong Sell. That is a bull-neutral tilt more than an enthusiastic majority, with Wedbush at the aggressive end.
How the Rest of the EV Complex Stacks Up Tesla fell alone. Peers did not sell off in sympathy, sharpening the argument that this is a Tesla-specific reset rather than an EV sector unwind.
Rivian (NASDAQ:RIVN) trades at $16.48, down 16.39% year to date, against an analyst target of $18.77 for roughly 13.9% upside. The Street is 11 Buy or Strong Buy, 10 Hold, 5 Sell or Strong Sell, a cautious posture ahead of the R2 ramp.
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Lucid (NASDAQ:LCID) is at $6.50, off 38.51% year to date, versus a target of $8.30, or about 27.7% upside. Analysts sit at 1 Buy, 8 Hold, and 3 Sell or Strong Sell, with recent revisions trending lower on cash burn.
General Motors (NYSE:GM) trades at $87.04, up 7.53% year to date, with a target of $98.31 and roughly 12.9% upside. Ratings run heavily bullish at 20 Buy or Strong Buy, 5 Hold, 2 Sell or Strong Sell after five straight EPS beats.
The largest analyst-implied upside in the group sits with Tesla, whether measured against the $401 consensus or Wedbush’s $600. The market is punishing Tesla’s AI spending in a way it is not punishing legacy or startup peers.
What the Stock Actually Says Tesla is down 31.24% year to date while the S&P 500 is up 8.38%. Shares trade below the 50-day moving average of $402.56 and the 200-day at $414.71, with a 52-week low of $297.82 just below the current price.
Valuation is where the debate lives. Trailing P/E of 285 and forward P/E of 156 only make sense if Optimus and robotaxi turn on. Real-money prediction markets are skeptical near term: Polymarket assigns just 15% probability to an Optimus commercial release by year-end 2026, and only 3.1% to shares touching $360 this week.
My Take: Wedbush’s Math Works, But the Timeline Is Long The bull case works if you accept the multiplier premise: FSD subscriptions compounding above 50% annually, robotaxi mileage growing more than 10% per week, and Optimus reaching meaningful volume within two or three years. In that world, the $25 billion capex bill is the price of admission for a software business inside a car company, and Wedbush’s $600 becomes a math problem grounded in unit economics.
The bear case is that this quarter revealed a structural margin problem instead of a growth investment. Operating margin at 1.4%, free cash flow flipping negative, and EPS missing by 38.51% describe a company still burning cash on ambitions, not one already earning software-like economics. Every quarter of delay on Optimus and Cybercab makes the terminal value harder to defend at 156 times forward earnings.
The target is a two-to-three-year call, not a next-quarter call. Buyers here need patience for the AI thesis to earn back the margin it is currently spending.
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Tesla (NASDAQ:TSLA | TSLA Price Prediction) just had its worst earnings reaction of the year. Shares closed at $313.03 on July 24, 2026, down 30.39% year to date, despite posting record Q2 deliveries of 480,126 vehicles and $28.24 billion in revenue.
CEO Elon Musk called this “the fastest industrial scale-up since World War II.” Wall Street called it a margin disaster. Can Tesla shares hit $500 by 2027? Here is the math.
The Real Reason Tesla Is Down 30% This Year The market punished profit collapse. Non-GAAP EPS came in at $0.33 versus a $0.5367 estimate, a 38.51% miss. Operating margin compressed to 1.4% as operating expenses jumped 47% to $4.35 billion, and free cash flow swung to negative $1.09 billion.
Tesla fell 14.52% on earnings day, then another 17.81% over the week. Short sellers booked $4.3 billion in mark-to-market gains from the one-day selloff. With a beta of 1.8, moves like this are the price of admission. Musk framed the capex surge as investment. Traders read it as cash burn.
Wall Street Sees 29% Upside. Our Model Sees More Consensus target sits at $402.76, built on 5 Strong Buys, 18 Buys, 18 Holds, 4 Sells, and 2 Strong Sells. Only 49% of analysts are outright bullish. Our base case lands at $366.51 with 17.08% upside, a 90% confidence bullish rating. The bull case pushes to $455.67, the bear case to $334.24.
Analysts are anchoring to Q2 margins and ignoring the setup. Q1 2026 auto gross margin recovered to 21.1%, deliveries hit a Q2 record, and Musk flagged the largest order backlog since 2023. That is a spending cycle setup.
The Path to $500 Per Share Reaching $500 from today’s price of $313.03 would require a gain of 59.7%. That is a stretch, but not absurd given shares traded at $498.83 within the last 52 weeks.
With forward EPS of $2.35, a price of $500 implies a forward P/E of 213x. Our base case of $366.51 already implies 180x, meaning the bold target requires roughly 33x of additional multiple expansion.
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Multiple expansion rides on execution. FSD subscriptions hit 1.48 million, up 56% YoY, robotaxi expanded to seven US metros, and Musk said “this is going to be a great year for Tesla, I think one of our best years ever. And I think next year will be even better.”
If Cybercab, Semi, and Megapack 3 ramps convert capex into earnings power, the multiple holds. Risk: Optimus and Cybercab scaling slip further into 2027, and margins stay compressed.
Where Tesla Trades Today vs Its Earnings Power At $313, Tesla trades at 133x forward EPS of $2.35. Rich by traditional standards. But shares sit only 19% below the 52-week high of $498.83 and just above the 52-week low of $297.82.
Ten-year return: 1,945.86%. Tesla has never been valued on trailing earnings, and that won’t change while robotaxi miles compound more than 10% a week.
Is $500 Realistic? My Verdict Hitting $500 requires a 59.7% gain and a re-rate to 213x forward earnings.
Three things need to go right: auto gross margin must recover toward the 21.1% Q1 level, Cybercab and Optimus must show real production traction, and FSD attach rates must keep climbing above 55%. Another quarter of negative free cash flow with no visible payoff on the $25 billion capex program would derail it. We’ve outlined the blueprint for how Tesla could reach $500 in 2027.
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In a new interview with The Economist’s Zanny Minton Beddoes, filmed at the Tesla (NASDAQ:TSLA | TSLA Price Prediction) Gigafactory in Texas, Elon Musk offered a prescription for the American economy that would have been unrecognizable coming from him a year ago. “I think the treasury should just simply issue people checks,” he said. This is the same person who, from January 20, 2025 until his May 28, 2025 departure, ran the Department of Government Efficiency with a mandate to take a chainsaw to federal outlays.
From $1 Trillion in Cuts to a Universal Payout DOGE launched with an audacious target: $1 trillion in federal spending cuts. That ambition was later scaled back to $150 billion. By the time Musk walked away roughly four months in, DOGE was claiming $214 billion in total savings through workforce cuts and canceled office leases, but analysts found many of those figures overstated, temporary, or unverifiable. For fiscal year 2026, only about $5.02 billion in savings could be independently verified.
The macro scoreboard was worse. During the relevant period, federal outlays rose from roughly $7.135 trillion to $7.558 trillion, about a 6% increase, because most federal spending is entitlement-driven and requires congressional action DOGE could not unilaterally make. DOGE did produce what has been described as the largest peacetime federal workforce reduction on record, but it did not bend the spending curve. By November 2025, DOGE was effectively dissolved, with the Office of Personnel Management absorbing most of its remaining functions.
The New Frame: “Universal High Income” The reasoning behind the check-writing pitch is technological. Musk told The Economist that “work is going to be optional” and that artificial intelligence “will be able to do any job better than any person can do that job.” He labeled the endpoint “universal high income,” explicitly distinguishing it from universal basic income. He also predicted “deflation will be the issue, not inflation” as AI reshapes production.
That deflation call runs against the current data. M2 money supply sits at $23.05T as of May 1, 2026, in the 90.9th percentile historically. The personal savings rate has fallen from 6.2% in 2024Q1 to 3.9% in 2026Q1. Consumer sentiment printed at 44.8 in May 2026, below the 60 recessionary threshold. The Treasury General Account, from which any such checks would flow, closed at $877,201 million on July 23, 2026.
His Own Tax Bill Musk framed his own relationship to redistribution in the same interview. He said he currently pays about 45% in taxes, that another roughly 45% will go to taxes at death, leaving him “a quarter of whatever I have.” He also claimed to have “set a record for the most amount of taxes ever paid by a human,” predicted he would ultimately “pay many trillions in tax,” and added that he is “fine with that.”
What Changed The through line is the shift in frame. In 2025, Musk approached the federal budget as an efficiency problem: too much spending, too many employees, too many leases. In the Economist interview, he approaches it as a distribution problem in a post-scarcity economy: too much output, not enough claimants. The signal to watch is whether that logic gains traction in Washington’s fiscal 2027 budget debate, or remains a Gigafactory soliloquy from the world’s richest AI investor.
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The world’s richest man has been losing money at a historic clip. Over roughly the past month, Elon Musk’s net worth has fallen by an average of $16.3 billion a day, according to a Benzinga tally. In the middle of that stretch, Musk sat down with The Economist at the Gigafactory in Texas and offered a forecast that reads, in context, as either serenely detached or perfectly on brand: “I’ll make another prediction. Money won’t matter in 2036.”
The peak came in mid-June. Shortly after SpaceX’s June 12, 2026 IPO, priced at $135 a share and valuing the company near $1.77 trillion, Musk’s paper wealth touched roughly $1.45 trillion, briefly making him the world’s first trillionaire. The trajectory since then has been almost vertical the other way. Per Benzinga, his net worth fell from about $1.32 trillion to roughly $832 billion over the course of a month, a decline of $488 billion, the figure that produces the $16.3 billion daily average.
Two engines drove the drawdown. SpaceX shares, after their debut spike, slid 41% to 45% at various points through the month, erasing more than $1 trillion in market capitalization at points. Then Tesla (NASDAQ:TSLA | TSLA Price Prediction) delivered a Q2 report that compounded the pain. Revenue of $28.24 billion beat the Street, but non-GAAP earnings per share of $0.33 missed the $0.5367 estimate, operating margin compressed to 1.4%, and free cash flow flipped to negative $1.09 billion. Tesla shares are down 23.92% since the SpaceX IPO date, closing Monday at $309.22.
Estimates vary by tracker, but the scale of the decline is consistent across all of them. Forbes had Musk at roughly $722.4 billion as of July 23, 2026, while Bloomberg’s Billionaires Index put him at $833 billion as of July 16, 2026. Even at the lower reading, he remains the world’s richest person by a wide margin.
The Economist interview, conducted by editor-in-chief Zanny Minton Beddoes, is where the juxtaposition sharpens. Musk frames the coming decade as “an age of amazing abundance where anyone can have anything they can think of,” and predicts AI will “exceed the sum of human intelligence in about… around five years.” The “money won’t matter” line is offered as the logical endpoint of that thesis about abundance. In the same conversation he sketches “universal high income,” says “work is going to be optional,” and suggests the Treasury should “just simply issue people checks.”
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The abundance is meant to arrive via the machines Tesla is building. The company’s $25 billion capital budget, capital expenditures of $5.79 billion in the quarter (up 141.81% year over year), and 47% surge in operating expenses to $4.35 billion are the near-term price of that vision. The one paying it, at the moment, is the shareholder.
The pick-and-shovel trade tells a different story. NVIDIA (NASDAQ:NVDA) carries a market capitalization of roughly $5.01 trillion, and is up 5.49% year to date while Tesla is down 31.24%. Jensen Huang is selling shovels today. Musk is selling 2036.
The signal to watch next is whether Tesla’s free cash flow stabilizes in Q3 and whether SpaceX shares find a floor as the post-IPO lockup dynamics settle. Until then, the world’s richest man will remain the most visible real-time example of wealth volatility, and the person forecasting that wealth itself will soon stop mattering.
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For years, Tesla (TSLA -1.43%) investors have looked beyond electric vehicles.
What excites them today isn't how many cars Tesla sells each quarter. It's the possibility that one day, millions of Tesla vehicles could operate as Robotaxis, while fleets of Optimus humanoid robots work in factories, warehouses, and perhaps even homes.
If that vision becomes reality, Tesla could evolve from an automaker into one of the world's largest artificial intelligence companies.
But those expecting these ventures to scale in the near term will be in for a huge disappointment, especially after the recent earnings call.
Image source: Getty Images.
A wake-up call on humanoid robots Tesla's recent earnings announcement hasn't been great for the stock. While there are both positives and negatives, one of the major disappointments is about its humanoid business, also known as Optimus.
Elon Musk said, "I really want to emphasize here that the production scaling challenge is very substantial." He went even further, calling it "the hardest product to scale manufacturing that we've ever made at Tesla."
And then the final blow, "So, I just want to make sure to calibrate people correctly. Optimus will follow the sort of normal S-curve of manufacturing of a manufacturing ramp, but the initial portion of the S-curve will be quite flat and long..."
Those aren't the words of someone expecting an overnight transformation. Instead, they highlight something investors often overlook: building revolutionary technology is only half the battle. Turning it into a profitable global business is much harder.
In the case of Optimus, building one robot may be easy. Building millions isn't. When people watch videos of Optimus walking, carrying objects, or performing simple tasks, it's easy to assume commercial success is just around the corner.
But that's not how manufacturing works. Building one impressive prototype is an engineering achievement. Building millions of reliable, affordable robots that consumers and businesses actually want to buy is an entirely different challenge.
That's exactly what Musk was referring to. Unlike Tesla's electric vehicles, Optimus relies on many newly designed components with supply chains that barely exist today. Tesla isn't simply assembling a new product -- it is helping build an entirely new manufacturing ecosystem.
That's why it is going to take time -- likely years, not quarters.
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Robotaxis face a similar challenge The same logic applies to Robotaxis. Tesla has made encouraging progress and is now live in seven major metros. In these cities, Tesla continues to test its autonomous driving capabilities and gather real-world driving data.
But demonstrating the technology in selected locations is very different from operating millions of driverless rides safely across hundreds of cities. That requires more than great software. It requires regulatory approval, public trust, insurance frameworks, operational support, and an economic business model that scales. Each of those hurdles takes time.
Moreover, Tesla has been very careful to ensure there are no accidents in these pilots, which is vital for long-term regulatory approval. So even if the company wants to go faster, it can't.
In other words, it will take a while before Tesla rolls out a pilot in all major U.S. cities, let alone scales the business to millions of vehicles.
Why patient investors may still win While most investors are not excited about the recent announcement, it is important to highlight that this does not mean Tesla's long-term opportunity has diminished.
In fact, the company may be positioned better than almost any other to commercialize autonomous driving and humanoid robotics.
Tesla already operates millions of connected vehicles, collecting real-world driving data. Also, it designs much of its hardware, software, and AI systems. Few companies possess that combination of assets, giving them an edge in bringing world-class products and potentially building hugely profitable businesses.
Still, investors should also recognize that the path from breakthrough technology to commercial success is rarely linear. There will likely be setbacks, delays, and periods where spending grows faster than profits.
That's simply the price of attempting something few companies achieved.
What does it mean for investors? Tesla's latest earnings weren't a warning that Robotaxis or Optimus won't happen. They were a reminder that even Elon Musk recognizes how difficult the next phase will be.
Inventing revolutionary products is extraordinarily difficult. Scaling them into affordable, reliable, and profitable businesses is even harder.
Tesla may eventually transform transportation and robotics. But if Musk's latest comments are any indication, investors should prepare for a marathon -- not a sprint.
After suffering a protracted downturn that started in May and an 18.40% collapse to $309.22 since July 21, Tesla (NASDAQ: TSLA) stock might finally be poised for recovery on the morning of Tuesday, July 28.
Specifically, the 14-day relative strength index (RSI) for TSLA shares has hit a value of 27 following the Monday regular session, meaning the equity is the most oversold it has been at any point since March 2025.
Tesla stock price and RSI two-year chart. Source: Barchart Notably, Tesla stock slowly regained upward momentum after hitting the previous low roughly 15 months ago, and the technical signal preceded a 90% rally from $250 to $480 between March and December last year.
Notably, the upsurge did not come immediately after the RSI flashed the buy signal, and TSLA suffered another downward phase before finally reversing in April 2025.
Why Tesla stock might fall further despite turning oversold Elsewhere, the situation is arguably different for Tesla in 2026 than it has been at almost any point during the decade.
Indeed, Elon Musk’s electric vehicle (EV) company is suffering from both confusion and disappointment given the recent business developments.
On the one hand, the rollout of autonomous driving, the ‘Robotaxi’ service, and the humanoid ‘Optimus’ robots is slower than hoped – and promised – leading to investor disappointment.
The situation is also exacerbated by the EV maker’s history of overpromising and underdelivering, with, by press time on July 28, 2026, multiple articles documenting the history of Elon Musk’s predictions of imminent breakthroughs that have yet to come to pass being available online.
Under the circumstances and given that Tesla stock has, arguably, been priced based on the hopes for the future rather than contemporary performance, there is much room to doubt if the latest technical signal can translate into a decisive rally.
On the other hand, the increasingly disappointing SpaceX (NASDAQ: SPCX) initial public offering (IPO) is itself drawing much attention from TSLA shares all the while sparking merger speculation – the rocket company has already acquired the artificial intelligence (AI) company xAi which has itself absorbed the social media platform X – and arguably increasing shareholder worries that Elon Musk might be a distracted leader for the foreseeable future.
Wall Street weighs in on whether Tesla stock is a good buy Notably, despite institutional analysts historically being mostly favorable toward the world’s richest man, their confidence in Tesla’s performance in 2027 also appears to be waning.
Indeed, Wall Street overall considers TSLA stock a ‘Hold,’ and forecasts a 22% rally to $383 on average, per the data Finbold retrieved from TipRanks on July 28.
Wall Street sets Tesla stock price target for the next 12 months. Source: TipRanks Still, it is worth remembering that rating aggregators tend to take all notes issued within the last three months into account, making the predicted 12-month rise more of a reflection of Tesla stock’s latest crash than of persistent institutional confidence.
Ultimately, while the latest RSI reading is likely to generate a rally in the coming months, the uptrend is unlikely to last barring a breakthrough announcement from the EV maker, rendering TSLA shares a dubious stock pick.
Tesla stock NASDAQ:TSLA has lost roughly 30% this year, leaving investors to decide whether the company’s emerging artificial-intelligence businesses can justify a valuation far above what its automotive profits currently support.
The stock closed Monday, July 27, at $309.22 after another 1.2% decline.
A $600 target would imply about 94% upside, meaning Tesla would need to almost double from its latest completed-session price.
That target is not a fresh response to Tesla’s second-quarter results. Then-Wedbush analyst Dan Ives established it in 2025 and maintained the bullish benchmark into 2026.
The latest earnings have made his argument considerably harder to prove. That shift has left the traditional car business carrying more financial weight.
Ives’ thesis rests on Tesla becoming more than an electric-vehicle manufacturer.
When raising his target, he wrote that the company was “taking major steps in advancing its AI Revolution path”, with autonomy and robotics at the centre.
The valuation case assigns substantial future value to robotaxi services, Full Self-Driving subscriptions and the Optimus humanoid robot.
Those businesses could theoretically produce higher margins and recurring revenue while expanding Tesla’s addressable market beyond vehicle sales.
However, at $309, the market is showing greater scepticism about when that promise will become meaningful cash flow.
Reaching $600 would require clearer evidence that Tesla can deploy unsupervised robotaxis at scale, increase paid software adoption and establish a credible commercial path for Optimus.
The target remains possible only under a successful AI scenario.
Analyst price objectives are projections, not guaranteed outcomes, and Tesla’s history of delayed product timelines makes execution central to any valuation built on distant earnings.
Tesla reported second-quarter revenue of $28.24 billion, up 26% from a year earlier, but adjusted earnings of 33 cents a share missed expectations.
Operating margin narrowed to 1.4%, highlighting the weakness beneath record vehicle deliveries.
Capital expenditure climbed to $5.8 billion as Tesla invested in AI computing, robotaxis, batteries and robot production.
Free cash flow turned negative by $1.1 billion, its first quarterly cash burn in more than two years.
“As capex more than doubles and free cash flow turns negative, investors are increasingly focused” on whether the spending strengthens Tesla’s physical-AI advantage, Morgan Stanley analysts led by Andrew Percoco wrote before earnings.
Heavy investment is not automatically bearish if it produces profitable businesses.
The difficulty is that investors still have limited information about robotaxi economics, Optimus costs and the timetable for material AI revenue.
Tesla expects annual capital expenditure to exceed $25 billion in 2026 and remain elevated.
That increases the risk of further cash burn before emerging businesses contribute enough income to offset their development and infrastructure costs.
Tesla (NASDAQ: TSLA) investors betting on a future SpaceX (NASDAQ: SPCX) acquisition as a catalyst for the electric vehicle maker are relying on the “Greater Fool Theory,” according to investment manager Gary Black.
The Future Fund managing partner, in an X post on July 27, pushed back against speculation that SpaceX could eventually acquire Tesla, arguing that such a deal would make little financial sense for SpaceX shareholders given the significant dilution it would entail.
Black said investors should own Tesla based on its core business prospects, including autonomous driving, vehicle demand, and earnings growth, rather than expectations of a SpaceX rescue.
His comments come as both Tesla and SpaceX face mounting pressure in 2026, with their stocks significantly underperforming broader market benchmarks.
Black’s criticism centers on the belief among some Tesla shareholders that SpaceX could acquire the company at a premium valuation.
I am amazed how many investors are holding $TSLA because they believe $SPCX will buy it. IMO, that won’t happen anytime soon since the potential dilution to SPCX shareholders is too significant if SPCX paid a 20% premium for TSLA only to have the combined entity trade at TSLA’s… https://t.co/C8mAkAvlJv pic.twitter.com/dW8xVKs1yt
— Gary Black (@garyblack00) July 27, 2026 He argued that such a deal would likely require SpaceX to pay a substantial premium, creating significant dilution for its shareholders.
The combined company would also likely trade closer to Tesla’s lower valuation multiple, reducing the benefits of SpaceX’s premium valuation.
SpaceX-Tesla lack of fundamentals As a result, Black views the Tesla-SpaceX rescue thesis as a speculative investment case rather than one supported by fundamentals.
Instead, he believes investors should focus on the rollout of unsupervised Full Self-Driving technology, the pace of autonomy adoption, and their potential impact on future earnings.
Supporters of a potential deal cite growing ties between the companies, including AI infrastructure projects, Starlink integration in Tesla vehicles, and shared engineering resources.
At the same time, Musk recently acknowledged the increasing overlap but stopped short of endorsing a merger, noting that any transaction would require proper governance and shareholder approval.
While analysts and prediction markets have assigned varying odds to a deal, Black argues that dilution concerns and fiduciary obligations make it difficult to justify at current valuations.
Tesla and SpaceX stock price struggles Notably, Tesla shares have struggled throughout 2026 despite reporting record second-quarter revenue. As of press time, TSLA stock was trading at $309, down more than 30% year-to-date and nearing 52-week lows.
TSLA one-week stock price chart. Source: Finbold Tesla posted record Q2 revenue of $28.2 billion, up 26% year-over-year, while vehicle deliveries rose 25% to 480,126 units.
However, investors focused on weaker profitability, with adjusted earnings missing expectations, operating margins shrinking to about 1.4%, and free cash flow turning negative amid heavy spending on AI, autonomy, robotics, and manufacturing expansion.
Concerns have also grown over the pace of Robotaxi and Optimus commercialization.
SpaceX has also come under pressure despite strong operational progress. Since its record June IPO, the stock has fallen roughly 50% from highs near $226 to about $113.50, reducing its market capitalization from peak levels, though it still stands near $1.5 trillion.
SPCX one-week stock price chart. Source: Finbold While Starlink growth, frequent launches, and Starship milestones remain positives, heavy investment in space infrastructure and AI initiatives has weighed on profitability.
Even with shares of Tesla (TSLA -1.43%) down over 30% this year, I'm still not ready to buy the stumbling stock. It's been a brutal 2026 for Tesla's investors, but the stock is still trading at an incredible premium, with its trailing P/E ratio sitting around 290. Simply put, the company's valuation of more than $1 trillion leaves little to no room for error.
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Tesla reported its second-quarter earnings last week, and while revenue and deliveries reached record levels, the electric vehicle company's operating income was slashed by 57% year over year, causing the operating margin to collapse to 1.4%.
Non-GAAP (adjusted) earnings per share missed analysts' consensus badly, coming in at just $0.33 per share compared to the expected $0.53. Tesla's free cash flow also turned negative as spending on AI, robotics, and autonomous initiatives increased substantially.
Understandably, Tesla is investing heavily in itself, but the problem is these decreases in operating income and margins aren't happening to a stock that's priced reasonably. Tesla's side projects, including robotaxis, full self-driving, and Optimus, aren't close to generating profits, either.
Image source: The Motley Fool.
Tesla has big ambitions, and I'm confident the company will reach most of its stated goals, but it feels like most of these future revenue streams are already baked into Tesla's current stock price. There isn't enough upside potential right now, even with the recent substantial dip.
Tesla is an innovative brand, but I need to see the valuation reconnect to the reality of the current fundamentals before I'll be willing to make a long-term purchase. Moreover, rivals such as Rivian Automotive and Lucid are gaining traction in the U.S. and are fairly priced. While these competitors won't overtake Tesla anytime soon, it's yet another challenge that Musk's company is going to have to tackle in the coming years.
Catie Hogan has positions in Rivian Automotive. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
