Although we're not done with the current earnings season, we can safely say that one of the more disappointing companies reporting its latest "quarterlies" is Tesla (TSLA -1.43%). Last week, the bellwether electric vehicle (EV) maker lifted the hood on its second-quarter performance, and investors clearly found this lacking.
Tesla's stock dived post-earnings, and it's yet to recover -- in fact, it's now flirting with a one-year low. Does that mean it's now a bargain buy for investors? Let's go behind the wheel and do a brief drive-by.
Image source: The Motley Fool.
Double-digit disappointment The sell-off wasn't for lack of top-line growth. In the quarter, Tesla's total revenue zoomed 26% higher to just over $28.2 billion. Fittingly, vehicle revenue formed the bulk of this; it rose by 23% to $20.5 billion.
The company also posted double-digit improvements in its two other revenue buckets. Energy generation and storage was up 13% to $3.1 billion, while services/other -- a grab bag comprising pre-owned vehicle sales, fees from its Supercharger charging stations, repairs, and parts sales, among other items, advanced by 50% to nearly $4.6 billion.
Doing a U-turn to the vehicles category, Tesla produced a total of 451,758 autos, 10% higher than in the same period of 2025. Its deliveries also increased, rising by 25% to 480,126. Yet in both instances -- and hardly for the first time -- those numbers were overwhelmingly comprised of only two models, the 3 sedan and the Y SUV.
Nevertheless, Tesla didn't hesitate to mention that it logged a new record for second-quarter deliveries. In the financial sphere, it earned $100 billion in revenue on a trailing twelve-month basis for the first time in its history.
As for profitability, it was in reverse. Under standards not conforming with generally accepted accounting principles (non-GAAP, or adjusted), net income fell by 17% to $1.15 billion, or $0.33 per share. One major culprit in this was capital expenditures, which ballooned by 142% to almost $5.8 billion.
That surprised many analysts, and not in a positive way. While the company edged past their collective revenue estimate of under $27.6 billion, it missed badly on the consensus adjusted net income forecast of $0.55 per share.
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That's one big spender I'd imagine most of the bearish investors bailing from Tesla after the earnings announcement were reacting to that heavy capex number. That, plus management's talk of continued high expenses for the remainder of this year, to be followed by increased spending in 2027 and 2028.
Where will all that capital be channeled? Like the tech companies it's often emulated, Tesla has spent, and aims to continue spending, large sums on building out the artificial intelligence (AI) capabilities enhancing its technology.
The not-yet-impressive Robotaxi program, for one, should continue to be generously supported; ditto for the Optimus robot that CEO Elon Musk is so fond of.
So basically, Tesla remains heavily dependent on EV sales at a time when competition continues to grow, and margins are shrinking. Meanwhile, it's devoting mountains of capital to technology that might or might not give it a competitive edge.
I'd say the same for products that are already significantly behind rivals -- like the Robotaxi when matched against Alphabet's Waymo. Or, especially, the unproven Optimus.
It's unwise to underestimate the often-mercurial yet clever Musk. Yet he and Tesla feel to me like an eternally over-reaching team whose prospects are now fading. This is a company operating chiefly in an increasingly low-margin business (automotive) that hasn't yet augmented it with enough whiz-bang products and services to keep the growth motor roaring for long.
Given that, I think the stock has more room to fall, and I'd stay away from it personally.
Tesla (NASDAQ:TSLA | TSLA Price Prediction) shares trade at $380.84 against an average Wall Street price target of $425.22. That works out to roughly 12% of implied upside from where the stock currently sits.
The gap hides a wider disagreement about what Tesla actually is. Buyers are underwriting Elon Musk’s roadmap for autonomous ride-hailing, humanoid robots, and vertically integrated AI silicon. Every quarter, the market decides how much of that future belongs in the price.
Wall Street is fractured on the answer. Consensus implies modest upside. Wedbush’s Dan Ives, the loudest bull on the name, has a $600 target anchored on FSD monetization, Robotaxi networks, and Optimus scale, with a bull case near $700 that would represent roughly 84% upside from today.
The 2026 Selloff Has Been a Slow Bleed Tesla is down 15.32% year to date while the S&P 500 is up 9%. The stock has dropped 6.6% in the past week alone and trades below its 50-day moving average of $409.80.
Q1 26 results didn’t justify the selloff. Revenue hit $22.387B, non-GAAP EPS came in at $0.41 (beating by 17.78%), automotive gross margin recovered to 21.1% from 16.2%, and Services & Other revenue climbed 42% YoY on 1.28M FSD subscribers. Headwinds came from energy storage revenue slipping 12% YoY, opex jumping 37% on AI/R&D, and inventory building to 27 days from 22.
Sentiment is the bigger issue. Polymarket traders assign just a 16% probability that Optimus launches this year and 19% that Tesla runs robotaxis in California by year-end. Those two products explain why Tesla trades at a 167x forward P/E. When the crowd stops believing the timeline, the multiple compresses.
Why the Loudest Bull Is Not Blinking Ives treats Tesla as a physical AI platform. His thesis rests on long-term monetization of Full Self-Driving subscriptions and autonomous Robotaxi networks, vertical integration into internal “Terafab” chip production, engineering synergies with SpaceX, and Optimus scaling toward the guided 1M robots per year capacity at Fremont.
Consensus is more measured. Of 47 covering analysts, 23 rate Tesla Buy or Strong Buy, 18 sit on Hold, and 6 rate it Sell or Strong Sell. Bank of America maintains a Buy with a $460 target. Morningstar calls the stock “fairly valued” at $450. Lower averages reflect analysts who see the AI ramp but won’t underwrite the Ives-style multi-trillion-dollar autonomy math.
Q2 earnings this week will move the debate. Analysts are watching FSD v14.3 uptake, Cybercab pilot production, Robotaxi expansion beyond Austin/Dallas/Houston, and the AI5 inference chip whose tape-out completed in April. If those items land on schedule, $425 stops being aspirational and $600 stops looking absurd.
Legacy Automakers Are Beating Tesla in 2026 Tesla is the outlier in its cohort. Ford and GM are priced as functional cash generators. Rivian trades on R2 launch momentum. None carry Tesla’s AI premium, and none share its 2026 underperformance.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Tesla didn't make the cut. Grab the names FREE today.
General Motors (NYSE:GM) sits at $76.07 versus a $95.85 target, roughly 26% upside. The stock is down 6% YTD despite Q1 26 adjusted EPS beating estimates by 41% and management raising 2026 guidance. Of 27 covering analysts, 20 rate it Buy or Strong Buy with just 2 sells.
Ford (NYSE:F) trades at $14.23 against a $15.05 target, only about 6% upside. Ford is up 11% YTD on Q1 26 EPS of $0.66, but 15 of 21 analysts covering it sit on Hold, recognizing the quarter leaned heavily on a $1.3B one-time tariff benefit.
Rivian (NASDAQ:RIVN) at $17.45 carries an $18.77 target, roughly 8% upside. The stock is down 11% YTD even after R2 customer deliveries began and a $1B VW equity infusion. Recent share issuance has weighed on sentiment.
GM carries the largest consensus-implied upside at 26%. Take Ives seriously and Tesla dwarfs the entire cohort. The peer setup argues Tesla’s dislocation is about company-specific narrative execution, with sector-wide auto weakness ruled out by peer performance.
What the Consensus Actually Signals Tesla trades at $380.84 against a $425.22 average target from 47 covering analysts, roughly 12% implied upside. Year to date the stock is down 15.32%, versus a 9% gain for the S&P 500. Over the past year, shares are up 19.23%.
The analyst ratings split:
Strong Buy: 5 Buy: 18 Hold: 18 Sell: 4 Strong Sell: 2 Tesla trades below both its 50-day ($409.80) and 200-day ($417.05) moving averages, roughly 24% below its 52-week high of $498.83 and 28% above the 52-week low of $297.82. Forward P/E sits at 167x.
Where I Come Out on Tesla The bull case strengthens if Q2 earnings confirm the Q1 gross margin recovery, if Robotaxi rolls out beyond current markets before year-end, and if AI5 silicon translates into a visible cost or performance edge. Under those conditions, $425 is easy math and the Ives $600 becomes defensible.
The bear case gains traction if Optimus and Cybercab slip into 2027, if FSD China approval stalls, and if energy storage revenue keeps shrinking. At 167x forward earnings, Tesla cannot afford another execution miss. Polymarket crowds, historically 75.8% accurate on prior TSLA questions, are already pricing skepticism into these near-term catalysts.
Consensus at $425 looks reachable if execution holds. The Ives $600 requires proof of execution.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Tesla didn't make the cut. Grab the names FREE today.
Investors in Tesla (TSLA -1.43%) stock are down 30% in 2026, and they are missing out on double-digit gains in broader market indexes.
*Stock prices used were the afternoon prices of July 24, 2026. The video was published on July 26, 2026.
Parkev Tatevosian, CFA has the following options: long December 2026 $320 puts on Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
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Bank of America Pops To New High, Leads 17 Newcomers To IBD 50, Other Top Stock lists Any investors hoping that Tesla stock might have turned over a new leaf by brushing off last week's losses were sorely disappointed on Monday. Not only did shares fall about 2%, they also reached the ignominious milestone of canceling out a year's worth of gains. Tesla (TSLA) stock is now down about 5.5% over the last 12 months, according to…
The Nasdaq-100 index is made up of the 100 most valuable companies listed on the Nasdaq stock exchange, excluding banks and financial institutions. It's often used as a barometer for the performance of the technology sector, which accounts for over half its total value.
The Nasdaq-100 is currently down 8% from its recent peak, and if the decline extends to 20%, it will constitute a technical bear market. The index last traded in bear territory during 2022 and 2023, which sent shares of Tesla (TSLA -1.43%) tumbling by 75% to just $100. The electric vehicle (EV) giant is at a disadvantage yet again, after reporting a disappointing set of operating results for the second quarter of 2026.
Tesla stock traded as high as $498 last year, but it has since declined to $310 as I write this. Here's why I predict it will revisit $100 if the Nasdaq-100 enters another bear market.
Image source: Tesla.
The EV business is slowly recovering Tesla is coming off two straight annual declines in its EV sales, but the tide appears to be turning in 2026. The company delivered 358,023 cars during the first quarter of 2026, which was up 6% from the year-ago period. That growth rate accelerated to 25% in Q2 with 480,126 deliveries.
EV sales still account for over 70% of Tesla's total revenue, so growth in this part of the business is critical to the company's overall financial performance. Unfortunately, the average selling price of each vehicle declined during Q2, resulting in a lower gross profit margin and an 18% decline in adjusted earnings per share. It appears Tesla is cutting prices for its EV lineup to attract buyers, which is great for sales but bad for the bottom line.
However, price cuts might be necessary for Tesla to remain competitive with its growing barrage of competitors. Chinese brands like BYD, Geely, and even Zeekr typically offer EVs at lower starting prices compared to Tesla in key markets like Europe, and they have also mostly caught up in terms of features.
However, Tesla CEO Elon Musk thinks his company's full self-driving (FSD) software could be a huge edge in the battle for EV market share. In regions where it's available, he said FSD has become the primary reason many customers enquire about buying a Tesla.
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Tesla might be falling behind in the autonomous race During a conference call with investors on July 22, Tesla's vice president of artificial intelligence (AI) Ashok Elluswamy said the company's autonomous taxi program has completed 380,000 miles of fully driverless operation across six cities in two U.S. states. This testing phase will lay the groundwork for the widespread regulatory approval of the unsupervised version of Tesla's FSD software.
As I mentioned, unsupervised FSD could be a big draw for many prospective EV customers, but it's also critical to the success of the Cybercab autonomous robotaxi, which recently went into production. Tesla is building a ride-hailing network where it can deploy fleets of Cybercabs all over the world, creating a high-margin revenue stream that flows consistently around the clock.
But the company is behind in this industry. Alphabet's Waymo is already completing over 500,000 paid, fully autonomous ride-hailing trips every week across 11 U.S. cities. It also has an expansion plan that includes 21 new cities, like London and Tokyo.
Waymo has also partnered with Uber, the world's largest ride-hailing network, giving its self-driving cars an incredible amount of reach. Even if Tesla's Cybercab is the best autonomous vehicle in the industry, the company will struggle to match Waymo's distribution.
Why Tesla stock could fall to $100 Expensive stocks tend to suffer the steepest losses during periods of turmoil in the broader market, as investors aim to reduce risk. Based on Tesla's trailing 12-month earnings of $1.08 per share, its stock is trading at a price-to-earnings (P/E) ratio of 288. That makes it eight times more expensive than the Nasdaq-100 technology index, which has a P/E ratio of 33.4.
TSLA PE Ratio data by YCharts.
If Tesla's earnings continue to decline, its stock might be even more expensive on a forward basis, which increases the risk of further downside. Speaking of which, even if the Nasdaq-100 enters a bear market and Tesla stock tumbles to $100, its P/E ratio would still be around 92, so even then it won't be cheap.
Tesla's P/E bottomed at around 30 during the last bear market in 2023. Since the company's earnings are lower today than they were back then, the same P/E would require a stock price of around $33 this time around. I'm not predicting that this will happen, because products like the Cybercab are closer to commercialization now, so investors might be willing to stomach a higher valuation because of the future growth potential.
Tesla's Optimus humanoid robot presents another major opportunity. The commercialization timeline is a bit vague right now because the company's engineers are still trying to perfect certain components, including its hands, but Musk previously told investors the robot could bring in a staggering $10 trillion in revenue over the long term.
As bullish as that sounds, I'm not prepared to pay nearly 300 times earnings for Tesla today in the hope Musk is right, especially given the jitters in the broader market.
Tesla TSLA shares extended their decline on Monday despite broader market optimism following easing tensions between the United States and Iran.
The electric vehicle maker's stock traded as high as $317 before falling to around $307.58 in trading, down about 1.74%.
The decline came even as Wall Street showed signs of recovery, with the Dow Jones Industrial Average posting gains while benchmark crude oil prices fell nearly 5%.
Tesla shares have been under heavy pressure since the company's second-quarter earnings report last week.
The stock dropped 18% over the week, including a nearly 15% decline on Thursday after the company reported operating profit of about $400 million, well below Wall Street expectations of roughly $1.7 billion.
Investors were also disappointed by the absence of significant updates on Tesla's artificial intelligence initiatives, including its robotaxi and humanoid robot businesses.
The company is increasingly relying on those projects to drive future earnings growth as electric vehicle sales have remained largely stagnant over the past two years.
Following the earnings release, Deutsche Bank analyst Edison Yu reduced his price target on Tesla to $420 from $465 while maintaining a Buy rating.
Tesla stock has now fallen about 30% year to date and roughly 5% over the past 12 months.
The shares have erased their year-over-year gains after rallying to nearly $500 in December 2025 as optimism around AI peaked following the launch of Tesla's robotaxi service in Austin, Texas.
The recent weakness reflects growing investor focus on Tesla's long-term artificial intelligence strategy rather than its traditional automotive business.
The company recently stopped producing the Model S and Model X, choosing instead to convert that production capacity for robot manufacturing.
Investors continue to look for evidence that Tesla can successfully scale its robotaxi network and AI-powered humanoid robots to support a new phase of earnings growth.
At the same time, some analysts remain cautious about the company's valuation and spending plans.
A Motley Fool report argued that Tesla continues to face pressure from weakening margins, declining profits, and higher investment spending.
The report also noted that the company's future growth remains uncertain, pointing to aggressive pricing strategies that could support revenue growth but weigh on profitability.
Speculation about a potential merger between Tesla and SpaceX resurfaced after CEO Elon Musk discussed synergies between the two companies during Tesla's earnings call.
However, longtime Tesla commentator Gary Black dismissed the likelihood of such a deal occurring in the near future.
"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 lower multiple."
Black argued that investors should instead own Tesla based on confidence in its autonomous driving ambitions.
"Owning TSLA for a buyout by SPCX is buying the greater fool theory."
Attention has also turned to SpaceX's recent stock performance.
After debuting at $135 and reaching a high of $225.64, SpaceX shares have fallen 32% over the past month, including an 8.5% decline over the last five trading sessions.
Tesla, Inc.'s FQ2 '26 earnings highlighted deteriorating margins and surging R&D/capex, with it triggering the painful post-earnings meltdown by -16.3%. There may be free cash flow/balance sheet risks as the management hints at outsized capex over the next few years, with it implying bottom-line headwinds. Future growth prospects remain mixed, with robotaxi rollout decelerating and Optimus ramp tied to Terafab's 2029 timeline, potentially negating the premium Elon Musk valuation.
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.
Cathie Wood doesn't mind volatility. The founder, CEO, and chief investment officer of Ark Invest went shopping as many of her existing positions were sinking.
Ark bought more shares of Tesla (TSLA -1.72%), Space Exploration Technologies (SPCX -2.85%), and Meta Platforms (META +0.18%) last week. The stocks would go on to decline between 7% and 18% for the week. Let's take a closer look at some of Wood's most prolific trades from the past week, each one among the 10 largest companies by market cap.
Image source: Getty Images.
1. Tesla It's been a bumpy road for the world's largest automaker by market cap. Tesla stock has fallen 16% in the final two trading days of last week, after the company posted disappointing financial results. The pullback isn't a fluke. Tesla has now fallen a humbling 37% since peaking seven months ago. Tesla entered this week just 5% away from taking out its 52-week low.
The second-quarter results were problematic. Total revenue rose 26% to $28.2 billion, but that was largely expected. Tesla had announced a 25% jump in vehicles delivered during the last three months three weeks ago. It's commendable that Tesla is growing its flagship business, following back-to-back quarters of sequential declines after the end of federal tax credits for electric vehicles in the third quarter of last year. The report gets worse once you get past the top-line results.
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Investors figured there would be challenges on the way down to the bottom line. There was heavy promotional activity to clear out its inventory stockpile, particularly in Europe, which accounted for the lion's share of the quarter's vehicle sales growth. There are investments to be made to build up the robotics business that CEO Elon Musk continues to play up as Tesla's biggest product ever. The market wasn't ready for how bad it would be.
Profitability was cut by more than half in the second quarter, performing considerably worse than analysts were targeting. Free cash flow turned negative. With its triple-digit earnings multiple standing out among the "Magnificent Seven" stocks, its very membership in that group is now open for debate. The original Magnificent Seven constituents were the seven most valuable U.S.-listed stocks by market cap. Tesla has since been passed up by three other names to command the tenth-largest market cap. The three companies that have overtaken Tesla's market cap include Musk's own SpaceX -- so that's the consolation prize -- but SpaceX itself has been having issues lately. Ark Invest was a buyer of Tesla stock on Thursday, just as Wood added to her largest position three weeks earlier when it slipped on the delivery report.
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2. SpaceX Speaking of SpaceX stock, interest in the space exploration and connectivity giant that Musk took public last month has been scrubbed like some of the industry's recent rocket launch attempts. The blazing debutante that traded as high as $225 on its third day of trading after going public at $135 is now a broken IPO. It closed just above $115 on Friday.
There is plenty of buzz about the game-changing Starship rocket, particularly its reusability, which should drive launch costs down substantially. This will also help its Starlink business, which provides satellite-based connectivity. Analysts see that business growing from a projected $15 billion to $20 billion this year to as high as $100 billion in four years. Even the more bearish analyst modeling $48 billion still represents strong growth for Starlink. Starship had another successful launch on Friday night, but now it's a waiting game until the stock itself takes off again.
Wood got into SpaceX ahead of its IPO. She's been a buyer again with the shares now trading below last month's debut price. Ark Invest bought shares on Monday and Wednesday of last week.
3. Meta Platforms Finally, we have Meta. Unlike Tesla and SpaceX, Facebook's parent company is more reasonably priced by traditional valuation metrics. The company that also owns Instagram and WhatsApp is now trading for just 18 times this year's projected earnings and 17 times next year's bottom-line target.
It only helps the valuation argument that the shares have fallen 17% over the past year while its profitability keeps growing. This doesn't mean that Meta is a bargain. With its capital expenditures expected to roughly double this year in the AI arms race, and its own Reality Labs metaverse initiatives losing money, a lot is riding on its three high-margin platforms to continue delivering results. Wood's Ark Invest was a buyer of Meta on Monday.
Tesla (TSLA -1.80%) reported earnings last week, and the stock has been in sell-off mode since. The numbers clearly didn't impress investors, sending the stock, which was already struggling heading into the earnings release, into a tailspin. As of Monday, the stock was down more than 31% year to date, and it's in danger of hitting a new 52-week low.
Could the stock be a good buy at its reduced valuation?
Image source: Getty Images.
What was so bad about Tesla's Q2 earnings? Investors dumped Tesla's stock after it reported its second-quarter earnings last week. The following day, the stock fell by nearly 15%, to just under $320, and it's been falling lower since then.
Tesla's revenue in Q2 rose 26% to $28.2 billion. But despite the strong top-line growth, the company's overall net income declined by 5%, to $1.1 billion. While its revenue rose rapidly, its margins were lower as the electric vehicle (EV) company has faced greater competition of late.
Furthermore, the company's free cash flow was negative at $1.1 billion, significantly worse than a year ago, when it was positive at $146 million. The company's capital expenditures also totaled $5.8 billion, more than doubling the $2.4 billion that Tesla spent in the prior-year period.
High capital expenditures have been a concern for tech investors, and with Tesla investing heavily in robots and its future growth, while its core EV business isn't producing strong profits, the stock has given investors plenty of reasons to be bearish.
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Why Tesla's stock may be heading even lower Besides believing in CEO Elon Musk and his visions of massive growth for Tesla in the future, there isn't much of a reason to buy shares of Tesla today. Its margins are worsening, profits are down, it's spending more, and yet, the stock's market cap remains incredibly high at $1.2 trillion. Based on analyst projections, it's trading at more than 150 times its future profits.
Tesla's future growth is uncertain. While it can boost revenue by lowering prices, that won't help the bottom line. Meanwhile, with the company spending more aggressively, that may raise concerns about whether it will need to raise more money in the future.
Although Tesla has been a top growth stock in recent years, I don't think that's going to be the case in the future, given the risks it's facing today and its high valuation; there's plenty of room for the stock to go even lower.
Have you evaluated the performance of Tesla's (TSLA - Free Report) international operations for the quarter ending June 2026? Given the extensive global presence of this electric car maker, analyzing the patterns in international revenues is crucial for understanding its financial strength and potential for growth.
In the current global economy, which is more interconnected than ever, a company's success in penetrating international markets is crucial for its financial health and growth journey. Investors must understand a company's dependence on overseas markets, as this offers a window into the company's earnings stability, its ability to benefit from varied economic cycles and its potential for long-term growth.
Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.
Upon examining TSLA's recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.
The company's total revenue for the quarter stood at $28.24 billion, increasing 25.5% year over year. Now, let's delve into TSLA's international revenue breakdown to gain insights into the significance of its operations beyond home turf.
Exploring TSLA's International Revenue PatternsOf the total revenue, $4.68 billion came from China during the last fiscal quarter, accounting for 16.6%. This represented a surprise of -6.28% as analysts had expected the region to contribute $4.99 billion to the total revenue. In comparison, the region contributed $4.18 billion, or 18.7%, and $4.31 billion, or 19.1%, to total revenue in the previous and year-ago quarters, respectively.
Other International generated $10.35 billion in revenues for the company in the last quarter, constituting 36.7% of the total. This represented a surprise of +42.99% compared to the $7.24 billion projected by Wall Street analysts. Comparatively, in the previous quarter, Other International accounted for $7.53 billion (33.6%), and in the year-ago quarter, it contributed $6.38 billion (28.4%) to the total revenue.
Anticipated Revenues in Overseas MarketsThe current fiscal quarter's total revenue for Tesla, as projected by Wall Street analysts, is expected to reach $27.2 billion, reflecting a decline of 3.2% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: China is anticipated to contribute 20.4% or $5.55 billion, and Other International 29.5% or $8.01 billion.
For the full year, the company is expected to generate $103.55 billion in total revenue, up 9.2% from the previous year. Revenues from China and Other International are expected to constitute 20.1% ($20.77 billion), and 29.8% ($30.89 billion) of the total, respectively.
Concluding RemarksRelying on global markets for revenues presents both prospects and challenges for Tesla. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.
In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.
Emphasizing a company's shifting earnings prospects is a key aspect of our approach at Zacks, especially since research has proven its substantial influence on a stock's price in the short run. This correlation is positively aligned, meaning that improved earnings projections tend to boost the stock's price.
The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.
At present, Tesla holds a Zacks Rank #3 (Hold). This ranking implies that its near-term performance might mirror the overall market movement. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
A Look at Tesla's Recent Stock Price PerformanceThe stock has declined by 17.6% over the past month compared to the 0.8% increase of the Zacks S&P 500 composite. Meanwhile, the Zacks Auto-Tires-Trucks sector, which includes Tesla,has decreased 9.9% during this time frame. Over the past three months, the company's shares have experienced a loss of 19.9% relative to the S&P 500's 3.8% increase. Throughout this period, the sector overall has witnessed a 12% decrease.
Tesla, Inc. shares have dropped ~30% YTD, erasing last year's gains and entering a bear market. I maintain a Buy rating on TSLA stock, viewing the recent ~20% post-Q2 correction as a potential buying opportunity. Short-term margin and cash flow concerns are driving the current selloff, but I see these as less critical and more temporary than sentiment suggests.
Tesla (NASDAQ: TSLA) could be on track for a deeper decline toward $200 after losing a key technical support level, according to market analysis.
The bearish outlook comes as the stock continues to struggle following its post-earnings sell-off, with shares trading around $313 after falling roughly 30% year-to-date.
TSLA YTD stock price chart. Source: Finbold The TSLA stock analysis shared by Ali Martinez in an X post on July 26 shows Tesla breaking below mid-range support near $360, a level that had previously acted as a key floor within the stock’s broader trading channel.
With that support now breached, traders are watching the $280 area as the next major downside target. If selling pressure persists, the channel bottom near $200 could come into focus.
Tesla lost a key support level.
The breakdown below the mid-range support shifts my focus to $280. If sellers remain in control, a move to the channel bottom near $200 could be next for $TSLA. pic.twitter.com/E1u3zlxZd8
— Ali Charts (@alicharts) July 26, 2026 At the same time, Tesla’s long-term trading structure appears to be weakening after the recent breakdown.
According to the analysis, TSLA faces resistance near $485, with former support around $360 and lower channel support close to $200. Tesla closed at $313, well below the $360 level.
The loss of this technical floor shifts the short-term focus toward $280, with a potential extension toward $200 if bearish momentum remains intact.
Such a move would represent an additional decline of about 36% from current levels and a drop of nearly 60% from Tesla’s 52-week high of $498.83.
Tesla stock fundamentals The bearish technical setup emerged after Tesla’s second-quarter 2026 earnings report triggered one of the stock’s sharpest declines in years.
Although revenue rose 26% year-over-year to $28.24 billion and vehicle deliveries reached a record 480,126 units, investors focused on weakening profitability. Adjusted earnings per share came in at $0.33, missing Wall Street expectations of roughly $0.51 to $0.55.
Meanwhile, operating margin fell to 1.4% from 4.1% a year earlier, while free cash flow turned negative at approximately $1.09 billion.
Capital expenditures surged 142% to $5.79 billion as Tesla increased spending on artificial intelligence, robotaxis, Optimus humanoid robots, battery production, and manufacturing expansion.
The market reacted negatively, sending Tesla shares down about 12% to 15% after earnings and wiping out more than $140 billion in market value.
Despite the near-term pressure, Tesla continues to report strong growth in several strategic areas. Full Self-Driving paid subscriptions climbed 56% year-over-year to 1.48 million, while the company expanded unsupervised robotaxi operations across multiple U.S. cities.
Tesla has also begun Cybercab production preparations at Giga Texas and continues advancing Optimus development, projects many bullish investors view as key long-term growth drivers.
While Wall Street’s average price target remains around $400, investors are increasingly weighing Tesla’s AI and autonomy ambitions against declining margins, rising spending, and execution risks.
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Key Takeaways Tesla shares fell 18% last week after mixed Q2 results, despite record deliveries and a revenue beat.TSLA missed earnings estimates, while FSD adoption and Cybercab production advanced in the quarter.ETFs like WATS hold notable Tesla weightings, offering diversified exposure to the stock. Shares of electric vehicle (EV) giant Tesla (TSLA - Free Report) have plunged nearly 18% over the past week, marking their worst weekly slump since 2022 and continuing the trend seen over the past several quarters. This follows the stock’s slip of nearly 4% in extended trading on July 22 (as cited in CNBC), after the company reported mixed second-quarter results.
Tesla failed to meet Wall Street expectations for its earnings but managed to comfortably beat its revenue estimates.
Impressively, the company achieved record deliveries globally in the second quarter, with sequential growth witnessed across all its geographical regions. It ended the quarter with its largest order backlog since 2023.
Such robust backlog figures strengthen revenue growth visibility for product-oriented giants like Tesla, and the recent share pullback may tempt dip-buyers. However, investor caution remains warranted. As Tesla shifts its core narrative from volume EV sales to autonomous tech and humanoid robotics, its primary revenue engine still faces pressure. With Robotaxis yet to reach commercial mass scale, deteriorating gross margins and declining average selling prices (ASPs) may keep more conservative investors on the sidelines for now.
Against this backdrop, a risk-averse investor may prefer to avoid direct single-stock exposure and instead consider exchange-traded funds (ETFs) with significant weightings in Tesla. By holding a diversified basket of industry leaders alongside Tesla, these funds help mitigate the idiosyncratic risks tied to a single company’s strategic pivot, spreading exposure across broader sectors.
Before highlighting such ETFs, it would be helpful to assess Tesla’s second-quarter performance across key metrics.
A Brief Analysis of TSLA’s Q2 ResultsTesla reported second-quarter 2026 earnings per share of 33 cents, which missed the Zacks Consensus Estimate by 34%. Its total revenues of $28.24 billion, however, surpassed the Zacks Consensus Estimate by 9.4%.
The company achieved record second-quarter vehicle deliveries, which improved 25% on a year-over-year basis. It is imperative to mention in this context that a large portion of Tesla’s vehicle demand has been backed by increased adoption of full-self driving (FSD) features in its cars.
About 55% of new vehicle deliveries in North America included enabled FSD subscriptions at purchase, while global active FSD users reached a record 1.48 million for TSLA during the second quarter.
As far as its Robotaxi business is concerned, Tesla started production of Cybercab, its purpose-built autonomous EV, in the second quarter. Engineering test drives of production Cybercabs on public roads have also begun during the quarter.
In its energy storage business, Tesla deployed 13.5 gigawatt-hours of energy storage, which reflected the second largest quarter for this business. However, gross margin for this business suffered a contraction of 1,910 basis points (bps), owing to legacy warranty expenses, disappearing tariff perks, and price pressure from rising industrial competition.
The company’s free cash flow turned negative in the second quarter after its capital spending more than doubled from the prior period. With Tesla’s management guiding capex to exceed $25 billion this year, with more to come over the next two to three years, one can expect the stock to continue to witness such cash burns in the near term.
Looking ahead, the company remains on track to begin production of Megapack 3 and Megablock battery systems this year at its new Megafactory Texas.
Tesla also remains actively focused on increasing production of its 4680 cells to support production ramps for both the Cybertruck and the Tesla Semi, as well as increased Model Y production. Meanwhile, first-generation production lines for Optimus are also expected to start in 2026.
Tesla-Heavy ETFs to WatchCorgi Battery Energy Storage Systems ETF (WATS - Free Report)
This fund, with net asset value of $19.59 as of July 24, 2026, offers exposure to 25 companies across the battery storage value chain, ranging from the cell manufacturers and power electronics providers building against record deployment demand to the energy management software, grid services platforms, and project developers scaling storage from rooftops to utility-scale installations. Tesla holds the first position in this ETF, with 15.07% weightage.
It charges 35 bps as fees.
The Nightview Fund (NITE - Free Report)
This fund, with a net asset value of $35.11 per share as of July 24, 2026, offers exposure to 15-25 securities that trade on U.S. exchanges, with a goal of outperforming the S&P 500 Total Return Index over a rolling five-year period. Tesla holds the first position in this fund, with 10.8% weightage.
This fund, with a net asset value of $114.04 per share as of July 24, 2026, this fund provides exposure to companies that substantially benefit from the development of new products or services, technological improvements, and advancements in scientific research related to, among other things, energy, automation and manufacturing, materials, artificial intelligence, and transportation. Tesla holds the first position in this fund, with 9.63% weightage.
This fund, with a net asset value of $48.93 per share as of July 23, 2026, offers exposure to the seven largest NASDAQ-listed companies. Tesla holds the seventh position in this fund, with 9.21% weightage.
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The Best of Both Worlds: Healthcare's Rare Blend of Defense and AI Upside It's hard to believe that AI names can also be defensive in today's market, but that's what healthcare offers during the "great rotation." Bryan Hayes explains how investors can find quality at a reasonable price under the AI theme.
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Mag 7 Earnings Preview: Alphabet's Cloud Surge and CapEx Hike Raise the Stakes The market reaction to Alphabet's Q2 results has significantly raised the bar for its Magnificent Seven peers that are on deck to report results this week, namely Microsoft and Meta Platforms on Wednesday, July 29th, and Apple and Amazon on Thursday, July 30th.
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How Many Stocks Should You Own? Three stocks or one hundred? Which are you? Plus 3 stocks with low PEG ratios. Tracey Ryniec sorts through the questions in the latest Zacks Value Trader podcast.
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Forget AI Chips and Mag 7: Buy AI Infrastructure Stocks Now Investors aiming to buy into the artificial intelligence boom driving the economy and Wall Street for the foreseeable future might want to consider best-in-class, AI-boosted infrastructure stocks.
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Top Research Reports for Intel, Dell & Progressive Intel's AI infrastructure push, Dell's AI server boom and Progressive's premium growth highlight the latest top research reports and key opportunities.
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Mag-7 Suffers Biggest Rout Since April 2025: ETFs to Buy The Mag-7 erased nearly $800 billion in value as AI spending worries resurfaced. Here are the ETF themes that could benefit from the shift.
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Q2 Earnings: Guidance Upgrades Push These 3 Stocks Higher Companies raising guidance, particularly on the earnings front, always deserve some level of attention from investors. Recently, JNJ, GM, and ABT have all raised their outlooks.
Companies raising guidance, particularly on the earnings front, always deserve some level of attention from investors. Recently, JNJ, GM, and ABT have all raised their outlooks.
Best Pharmaceutical Stocks to Buy for July 2026 The pharmaceutical industry continues to grow thanks to an aging population and rising demand for new treatments. Which pharma stocks are best?
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Tesla (NASDAQ:TSLA | TSLA Price Prediction) investors got a brutal reminder last week that ambitious targets can curdle into cautionary tales. A Bloomberg report published July 22, 2026 argued the Cybertruck has eclipsed the Ford Edsel as the auto industry’s benchmark commercial flop on a target-versus-actual basis. Hours later, Tesla posted a Q2 earnings miss, and the stock logged its worst week since 2022.
The Edsel Yardstick Ford launched the Edsel in 1957 with projections of 200,000 units in its first year. It sold less than one-third of that target, and its vertical grille (mocked as resembling a toilet seat) became shorthand for corporate failure that has endured nearly seven decades.
Elon Musk set a higher bar. He projected the Cybertruck could reach 250,000 units annually and called it Tesla’s “best product ever.” In its first full year, the truck sold roughly one-sixth of that target. Per Bloomberg’s chart, Year 2 sales fell to well under 25,000, a steeper proportional miss than the Edsel’s.
An Accelerating Decline Cox Automotive figures show the trajectory. Cybertruck sold 38,965 units in 2024, then 20,237 units in 2025, a 48.1% year-over-year decline. Q4 2025 volume was 4,140 units, down 68.1% from 12,991 a year earlier. Q1 2026 hit a record low of 3,519 deliveries, and only 7,133 Cybertrucks were registered in the U.S. through May 2026, per S&P Global Mobility data cited by Bloomberg.
The truck posted the steepest sales decline of any EV nameplate in the U.S. in 2025. Tesla’s earnings materials list the Cybertruck alongside Model 3, Model Y, Model S, Model X, Cybercab, Semi and Roadster, but it has not appeared as a growth driver in the last four quarterly reports.
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The Stock Rout The Cybertruck story is one strand in a broader unraveling. Tesla shares fell 17.81% in the week ending July 24, 2026, closing at $313.03. The single-session drop after earnings ran to 14%, sending the stock to an 11-month low.
The Q2 report explains the reaction. Revenue reached $28.24 billion, up 25.52% year-over-year, on record deliveries of 480,126 vehicles. Adjusted EPS of $0.33, missing the $0.5367 consensus. Operating income slid 56.88% to $398 million, free cash flow swung to negative $1.09 billion, and operating expenses surged 47% to $4.35 billion on AI infrastructure, R&D and stock-based compensation. Full-year capex is guided to over $25 billion for Optimus, Cybercab and AI data centers.
Short sellers booked $4.3 billion in mark-to-market gains from the single day’s selloff. The stretch cost Musk roughly $130 billion in personal net worth.
What to Watch Shares are down 30.39% year-to-date, and prediction markets imply consolidation in the $300 to $330 range through month-end, against an analyst consensus target of $402.76. Whether the Cybertruck earns a legacy similar to the Edsel remains an open question.
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Elon Musk's Tesla on Monday won its bid to revive a London lawsuit brought against U.S. technology firm InterDigital and a patent licensing platform, seeking a patent licence ahead of the automaker's launch of 5G vehicles in Britain.
Obrovské investice do umělé inteligence jsou prováděny jen na základě současných spotových cen. Pokud by pak například došlo k růstu výnosů vládních dluhopisů, tyto projekty by se z hlediska návratnosti staly velmi problematickými. Tímto způsobem uvažuje o dění kolem umělé inteligence známý investor Jim Chanos (viz první dvě části rozhovoru), k tomu přidal i svůj pohled na SpaceX
Chanos poukázal na to, že společnosti provozující starší datová centra se jich snaží zbavit. Podle něj to může být známka celkového posunu na trhu, kdy rostou náklady provozu těchto center, jednak provozní, ale i udržovací investice. To ukazuje na klesající návratnost. Pak se diskuse přesunula k údajnému nedostatku elektrické energie s tím, že některé společnosti „nemají nedostatek čipů, ale právě energie.“ Chanos k tomu řekl, že „pokud v této zemi není něčeho málo, je to energie.“ Mohou být problémy s přenosovou soustavou, „ale levné energie není nedostatek.“
Podle experta tvoří náklady na energie jen asi 5 – 6 % celkových nákladů provozu datových center a zhruba do dvou let podle něj nepůjde o významné téma. Energie tak nebudou překážkou, na kterou bude budování a provoz datových center narážet. Ty se ale objevují na politické rovině, protože sílí odpor k nim. „To by mohl být problém, energie jím podle mého názoru nebudou.“ Trhy se pak podle experta posouvají ve vnímání toho, když nějaká energetická společnost ohlásí novou dohodu na dodávky energie pro datová centra. Zatímco dříve byly tyto povětšinou velmi dlouhodobé kontrakty vítány, nyní podle Chanose při jejich oznámení cena akcie dané energetiky spíše klesá. A „to je důležitá změna“.
Navíc podle Chanose dochází ke znatelnému poklesu návratnosti každého dalšího dolaru investovaného hyperscalery. „Návratnost je stále zdravá, ale na celkové úrovni klesla zhruba ze 40 % z doby před jedním a půl rokem na současných asi 20 %. Pokud budou investice pokračovat současným tempem, návratnost klesne k 10 % a pak budou hyperscaleři vážně zvažovat, zda budou dál investovat.“ Nejhůře je na tom nyní s návratností Oracle a „ostatní se na něj dívají s tím, že na tak nízké úrovni být nechtějí.“
Přes výše uvedené jdou odhady dalších investic do AI infrastruktury nahoru a „na konci letošního roku a v roce příštím se lidé začnou ptát, zda ten další bilion dolarů dává smysl, pokud se z něj vydělá jen 15 miliard dolarů… Do tohoto bodu se dostaneme někdy během následujících 12 měsíců.“ Pak se mluvilo o tom, že roste počet právních sporů mezi některými velkými technologickými společnostmi, v době, kdy je řada z nich zároveň investičně a finančně provázána. Dalším tématem bylo to, že dříve stávaly v centru problémů a tenzí banky, nyní tomu tak není. Nicméně umělá inteligence a investice do ní jsou stále více „financializovány“ a jejich vliv se projevuje v širším systému. Podle některých názorů jsou nyní dokonce i banky „AI akciemi“.
Na závěr dostal Chanos otázku, zda přes vše uvedené nemohou mít nakonec býci ve vztahu k investicím do AI pravdu? Odpověděl, že na základě AI bude vytvořena velká hodnota a budou tu velcí vítězové. Nyní je ale na trhu naceněno „vše tak, že všechno bude fungovat. Což byl problém v devadesátých letech… Pak ale přišla studená sprcha. Teď jsou tu společnosti jako Tesla a SpaceX, jejich valuace stojí na slibech. A proč by nemohl přijít někdo jiný a říkat, že to samé platí o jeho firmě? Je to jen otázka psychologie trhu, nyní jsme ve fázi, kdy se investuje na základě slibů.“
Tesla (TSLA -2.14%) plunged by 14% after releasing its second-quarter earnings, but that dip may just be the beginning. The company has physical artificial intelligence (AI) products in the pipeline, with Optimus robots being a future catalyst, but Tesla still relies heavily on automobile sales and has the profit margins of an automaker.
Image source: Getty Images.
Rising capital expenditures without rising profits Elon Musk told investors to expect a "massive capex year" in 2026, while Tesla CFO Vaibhav Taneja anticipates capital expenditures (capex) growing for "the next two or three years."
It's the cost of doing business as tech companies scramble to throw capital at AI opportunities, but Tesla hasn't boosted profits for all of that spend. Alphabet (GOOG +0.21%) (GOOGL +0.58%) reported higher operating income, even with higher AI expenditures, and that has been a common pattern among the largest tech companies.
Tesla's operating income dropped by 57% year over year, and the company had only a 1.4% operating margin. Electric vehicles still make up a large portion of total revenue, more than 70%. Automobiles are a low-margin business, and Tesla's rising capital expenditures guarantee that its margins will be under more pressure for multiple years.
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Assessing the valuation Tesla trades at almost a 300 price-to-earnings (P/E) ratio, even after the recent dip. If you treat it like a pure-play automobile stock, that valuation needs to drop a lot before Tesla reaches fair value.
Bulls have rightly argued that it's not just an automobile stock. The high capital expenditures are going toward Robotaxis and Optimus robots. These are moonshot opportunities that can help justify the current valuation, but for now, they have zero impact on Tesla's business.
A quote from Elon Musk perfectly sums up the opportunities and risks associated with Tesla stock: "I'm confident that all the things that we're investing in will yield incredible returns," Musk said during the call.
Investors are holding on to shares because they believe robotaxis and robots will fuel the next megacycle. However, there are several questions that the current valuation does not account for.
How long will it take for these opportunities to become commercialized? Will Tesla get a large market share with these innovations or gradually lose ground, as has been the case for its electric vehicles? Will demand be strong enough to justify Tesla's current market cap?
These questions show plenty of uncertainty and business execution risk. Elon Musk previously predicted its Robotaxis would be available to half the U.S. population by the end of 2025, which did not materialize. These initiatives may eventually pan out. However, "eventually" isn't a justification for a nearly 300 P/E ratio when most of the money coming in is from electric vehicles and margins are tightening.
Tesla stock needs a deeper dip before it will justify purchasing shares.
Tesla delivered record Q2 revenues and vehicle deliveries, but earnings remain under pressure due to surging operating expenses and capital expenditures. TSLA's growth thesis now hinges on monetizing FSD, robotaxi, and Optimus, but these ventures are early-stage and currently dilute earnings. Despite robust cash reserves, negative free cash flow and rising CapEx make TSLA's valuation highly dependent on future success in software and robotics.
A difficult year for Tesla's (TSLA -2.14%) stock got even worse after the stock fell more than 15% on July 23 in the aftermath of its second-quarter earnings report. The stock is now down more than 30% year to date.
Shares of the electric vehicle (EV) maker fell after the company badly missed adjusted EPS estimates, talked of increasing capital expenditures (capex), and dramatically changed its tone about its robotaxi rollout.
Image source: The Motely Fool
Heavy investments and lack of progress spook investors Increased capex spending has become a Wall Street bugaboo, and Tesla said that it is in the midst of a massive investment cycle. It plans to spend $25 billion in capex this year, with it growing over the next two to three years as the company increases its Optimus robot production capacity, expands its robotaxi fleet, builds out AI computing infrastructure, and invests in its TeraFab project.
At the same time, the company toned down robotaxi expectations. While it said its robotaxi efforts were going "extremely well," and touted its safety record and technology, it was a far cry from a year ago when Elon Musk predicted that its robotaxis would be accessible to half the U.S. population by the end of 2025. They weren't, and supervised and unsupervised Robotaxi rides are still only available in two states. According to Tech Crunch, the number of robotaxi miles carrying paying customers also fell 36% sequentially in Q2. That's a bad sign for a stock whose valuation is largely tied to future bets.
Meanwhile, for its Optimus robot, CEO Elon Musk once again said he thought it would become Tesla's biggest product ever. However, he admitted that there are major technical hurdles still to overcome, including with the "electromechanical design of the robot to achieve sufficient dexterity." He also noted that Tesla was having difficulty ramping up production due to newness of parts and the lack of an existing supply chain.
Getting parts for Optimus also ties into Tesla wanting to build its own fab that would have logic, memory, and advanced packaging all done in the same facility. Its an ambitious project that even Nvidia's CEO said will be difficult to pull off.
As for its actual results, Tesla's automobile deliveries in Q2 climbed 25%. That was a big jump from the 6% increase it saw in Q1 and a reversal from the declines it saw throughout much of 2025. Its total production, meanwhile, increased by 10%.
The increase in deliveries helped Tesla's auto revenue rise by 23% to $20.5 billion in the quarter. The revenue was also helped by a 54% jump in active FSD (full-self driving) subscriptions (which includes monthly subscriptions and upfront purchases) to 1.48 million users. However, the company's high gross margin regulatory credit revenue plunged by 67% to $146 million. That's a big reason why the company's adjusted EPS fell well short of expectations, along with a 47% jump in operating expenses.
Overall, Tesla's revenue climbed 26% year over year to $28.2 billion. Its energy generation and storage revenue rose by 13% to $3.1 billion, while its service revenue surged 50% to nearly $4.6 billion. Adjusted earnings per share (EPS) sank 18% to $0.33, missing the analyst consensus of $0.51, as compiled by LSEG.
Tesla's operating cash flow climbed 85% in the quarter to $4.7 billion, but it spent $5.8 billion in capex, leading to negative free cash flow of $1.1 billion.
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The removal of civil penalties for autos not meeting Corporate Average Fuel Economy (CAFE) standards and the loosening of emission restrictions in Europe have taken a huge bite out of Tesla's high-margin regulatory credit revenue. This has been a major source of profits for the company that has now considerably declined, pressuring its core EV business. Meanwhile, its robotaxi and robotics businesses remain unproven and thus far have underwhelmed.
The potential of Tesla being eventually acquired by Musk's other company, SpaceX, could help provide a floor for the stock. However, that's provided that SpaceX can stop its own free fall. With a struggling core business and a valuation (170x forward P/E) based solely on speculative bets, I'd stay away from Tesla stock.
Tesla (TSLA -2.14%) has continued its habit of providing overly optimistic forecasts, and investors are realizing that the company's prospects may not be as good as they say.
*Stock prices used were the afternoon prices of July 22, 2026. The video was published on July 24, 2026.
Parkev Tatevosian, CFA has the following options: long December 2026 $320 puts on Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Tesla (TSLA -2.14%) shareholders had a rough Thursday. Shares of the electric car maker sank about 15% following the company's second-quarter report, closing at $319.69 -- near the bottom of a 52-week range that runs from $297.82 to $498.83.
But Wall Street barely budged. The average analyst price target on the stock sits near $412 as of this writing, about 29% above Thursday's close. And across the 44 analysts covering the company, the consensus rating is still a buy.
That's quite a gap. So is the drop a buying opportunity, or is Wall Street just slow to mark down a story it has believed in for years?
Image source: Tesla.
The quarter behind the drop Tesla's revenue rose 26% year over year to $28.2 billion in the second quarter of 2026, helped by 480,126 vehicle deliveries -- the company's best second quarter ever. That marked an acceleration from 16% growth in Q1, and it pushed the company past $100 billion in trailing-12-month revenue for the first time. After revenue shrank last year, the top line is moving again.
The profit side is another matter. Operating income fell 57% year over year to $398 million, squeezing Tesla's operating margin to 1.4% from 4.1% a year earlier. Adjusted earnings per share came in at $0.33, down 18% from a year earlier. For every dollar of record revenue, barely a penny reached operating profit.
Notably, the problem wasn't the economics of selling cars. Tesla's automotive gross margin slipped only modestly, to 16.9%.
The damage came from everything below that line, as the company spends heavily on AI (artificial intelligence), its robotaxi service, and its Optimus robot program, plus stock-based compensation tied to CEO Elon Musk's 2025 pay award. Regulatory credit revenue, a high-margin helper in past quarters, also collapsed 67% to $146 million.
And for the first time in years, the quarter burned cash. Capital expenditures more than doubled to $5.8 billion, pushing free cash flow to negative $1.1 billion.
In short, Tesla delivered record second-quarter volume and record revenue, and almost none of it reached operating profit. That's the quarter the market repriced on Thursday.
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What the 29% of upside is made of Now back to that $412 average price target.
A price target is a model's output. And the analysts behind those models are, on average, still crediting Tesla for a future of high-margin software, a scaled robotaxi network, and strong returns on all of this AI spending. The 29% gap between the target and Thursday's close arguably measures faith in that future more than it measures a discount on the business Tesla runs today.
After all, even at $319.69, the stock trades at about 300 times earnings. A company earning $0.33 a share in its best revenue quarter ever doesn't support a price like that on its own. So much future success is already priced in that the shares can fall 15% and still not look cheap on any near-term measure.
To be fair, the report offered evidence the newer businesses are moving. Services and other revenue rose 50% year over year, and energy storage deployments climbed 41% to 13.5 gigawatt-hours. But those lines remain small next to the car business that still pays Tesla's bills, and neither is yet big enough to carry the company's margin on its own.
So I don't treat the gap between the price and the target as an opportunity in itself. Targets get updated on a delay after a move this size.
The average could keep drifting down toward the price instead of the price rising to meet it.
Could the models be right? Sure.
If Tesla's robotaxi and AI bets pay off on anything like the timeline the bulls expect, today's price may well look cheap in hindsight. That has happened with this company before. I just don't think investors should pay about 300 times earnings for that outcome while the operating margin sits at 1.4% and the spending is still accelerating.
I'm not buying the drop, and the 29% of upside on paper doesn't change that. What would get my attention is profit growth showing up alongside the revenue growth.
SummaryI previously called the SpaceX optionality, and that call was dead wrong. The business underneath it got worse, so I'm downgrading to a sell.Texas registrations quadrupled in six weeks. Cars actually driving unsupervised: still about twenty. Registered isn't driving, and I need unsupervised autonomous driving.Strip out the SpaceX mark and the tax benefit, and roughly $77 million of profit is left on $28.2 billion of revenue. A 1.4% operating margin is the real quarter.I'm watching two things into late October: does the driverless fleet finally grow, and does SPCX bounce back? If they do, this downgrade ages badly. hirun/iStock via Getty Images
Two-thirds of Tesla's (TSLA) reported profit this quarter traces back to a stock Elon Musk's other company just took public.
Equity gains, or should I say “gainz” to sound a bit cooler, because there are quite a few tech
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SummaryTesla faces significant program delays in robotaxi and humanoid robots, undermining its first-mover advantage and premium valuation.Q2 '26 results showed a big EPS miss, heavy capex of $5.8B, and negative free cash flow, despite a revenue beat.TSLA continues aggressive spending on unproven products, with capex plans exceeding $25B and no near-term revenue visibility from major robotaxi and robots catalysts.The stock should be avoided, trading at 170x forward EPS with delayed growth drivers and heightened execution risk.Looking for more investing ideas like this one? Get them exclusively at Out Fox The Street. Learn More » julos/iStock via Getty Images
Tesla, Inc. (TSLA) crashed this week as the company confirmed further delays in key programs, further eroding any first-mover advantage potential. The stock is now below levels originally hit back in late 2021, likely contributing to
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The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock, you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.
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.
The most interesting exchange on Tesla's (TSLA -2.14%) July 22 earnings call wasn't about margins. An analyst asked CEO Elon Musk whether he eventually sees synergies from combining Tesla with SpaceX (SPCX -2.85%), the rocket and satellite company that went public in June. Musk didn't say yes. More notably, he didn't say no.
There's "more and more overlap" between the two companies, Musk said on the call. He pointed in particular to Terafab, SpaceX's planned chipmaking venture, which he said is "really going to be a gigantic project."
As for a deal, Musk said he couldn't discuss "combining companies and that kind of thing" in that setting. It has to happen through "the appropriate process."
That is not a denial. And coming from the CEO of both companies, it's enough to make a merger a live question for two of the largest shareholder bases in the market.
Image source: White House.
The overlap is already real business The companies are intertwined today. Tesla's general counsel noted on the call that the relationship deepened this year through an investment and a framework agreement between the two companies. Grok, the AI (artificial intelligence) assistant built into Tesla vehicles, comes from the xAI business SpaceX absorbed before its initial public offering (IPO). Tesla's Cybercab robotaxis are expected to lean on SpaceX's Starlink network for connectivity. And Terafab could eventually supply the chips Tesla needs for its cars and robots.
Bankers have noticed, too. JPMorgan told clients this month that a combination would make strategic sense on paper, uniting Musk's ambitions in AI, transportation, and space under one roof. But the firm also cautioned that executing a deal is a far messier matter than the logic suggests.
The messy part deserves the emphasis. Two obstacles stand out.
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The first is pricing. A merger needs an exchange ratio (how many shares of one company each share of the other is worth), and both of these stocks trade on stories rather than current profits. SpaceX carries a $1.5 trillion market value on trailing-12-month revenue of about $19 billion (up 33% from the year before), and it's still unprofitable. Tesla, valued at about $1.2 trillion, trades at more than 300 times earnings after this week's post-earnings sell-off.
Musk himself complicates the math. He controls about 85% of SpaceX's voting power, versus about 20% of Tesla's, so he effectively sits on both sides of the negotiation. Tesla's board needs an independent process robust enough to survive the shareholder lawsuits that reliably follow deals like this one.
The second obstacle is Washington. SpaceX is a major defense and government contractor. Tesla operates one of its largest factories in Shanghai and depends on China for a meaningful share of its sales and supply chain. Folding a national security asset into a company with deep Chinese exposure invites regulatory scrutiny in both countries -- and Starlink isn't even approved to operate in China. Of course, a review like that could stretch on for years, with no guarantee of approval.
Which shareholders would a deal reward? It depends entirely on the exchange ratio, and that's the problem. SpaceX shareholders own the larger company by market value, and the asset Musk has the deeper economic interest in. Tesla shareholders get exposure to Starlink's fast-growing revenue in a deal, but they'd be paying with stock the ultimate decision maker has less personal incentive to defend. Every version of the math involves the same person on both sides of the table.
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My take is that investors shouldn't own either stock because of a potential merger. A combination may eventually happen, and Musk's comments suggest the idea is at least alive. But the timing and terms are unknowable today, and the regulatory path could take years.
What investors can evaluate is each business on its own. Tesla just reported a 1.4% operating margin for the second quarter as it pours money into AI and robotaxis, and its shares sank about 14% on Thursday. SpaceX is weeks away from its first earnings report, due Aug. 4. Both stocks already price in spectacular futures, and I think each company should have to prove its own case first. Treat any merger as news to react to if it comes. Betting on it in advance is just speculation.
Tesla (TSLA) was the worst performing stock in the S&P 500 (SPX) this week. @CharlesSchwab's Rachel Dashiell looks at the charts and the options activity as the company trades near a 52-week low.
Tesla shares plunged 18% during the week to close at $313.03 on Friday, their worst weekly slump since 2022. And SpaceX continued its downward slide, dropping 7.2% over five days to close at $115.07 Friday, its lowest since the company's record IPO last month.
The declines in both stocks wiped away about $130 billion of Musk's wealth, weeks after he'd become the world's first trillionaire. In a post on X on Friday, Musk wrote, "(Former) trillionaire."
Tesla's slump was spurred by weaker-than-expected earnings when the electric vehicle maker reported second-quarter results late Wednesday. The company turned cash flow negative due to a surge in spending on futuristic projects like robotaxis, humanoid robots and a giant chip fab.
"We expect this to pressure free cash flow and delay earnings growth, without providing any near-term shareholder return," wrote analysts at Argus Research, which has a hold rating on the stock, in a report on Friday. "We believe it will be nearly impossible for Tesla to generate any consistency in profit growth in the near-term."
Tesla's stock is now down 30% for the year, by far the worst performer among tech's megacaps.
Read more CNBC tech newsMoonshot AI accessed Nvidia's chips despite Chinese export ban, White House official saysAlphabet and Tesla test Wall Street's patience as AI spending overshadows growthAlphabet earnings takeaways: Q2 revenue beats, GOOGL stock sinks on 2026 capex hikeTesla misses on earnings, as free cash flow turns negative and margins slideMeanwhile, SpaceX's stock has been on a steady downward trajectory over the past month following an initial pop when the company went public. The shares have dropped for four of the past five weeks and are about 43% off their peak close on June 16.
On Friday evening, SpaceX will again attempt the 13th test flight of Starship, the largest rocket ever built or flown. The company plans to fly the new version of the rocket, Starship V3, from its company town and launch facility in Starbase, Texas. The rocket is designed to be fully reusable and is considered crucial for SpaceX's near-term aims to vastly grow its Starlink satellite network.
In a post on X, which is owned by SpaceX, the company said it delayed the test flight planned for Thursday "due to weather." SpaceX previously scrubbed a test flight last week, after the rocket's booster triggered a hold, which "shut down the engines right as they were starting to ignite," a SpaceX employee said during a livestream of the event.
A successful launch of Starship V3, an upgraded version of its roughly 400-foot-tall rocket, would be the first since the company's IPO.
SpaceX plans to use Starship to bring U.S. astronauts back to the Moon's surface, and Musk wants the rocket to eventually run manned missions to Mars.
Musk made a public appearance this week, sitting down for what turned out to be a contentious interview with The Economist.
Zanny Minton Beddoes, editor-in-chief of the publication, asked Musk about his support for "not just the populist right, but the far right, in fact very fringe parties in some countries."
In addition to his financial and vocal support for President Donald Trump, including his work for the second administration, Musk has endorsed Germany's AfD, an extreme anti-immigrant party, as well as the UK's Restore Britain, founded by Rupert Lowe, who also calls to "reverse mass migration."
"It's just normal people!" Musk said in response. He berated Beddoes and "the traditional media" for an "absurd characterization of the far right."
Tesla (TSLA -3.22%) needs no introduction. The Elon Musk-led technology business ranks 11th among the world's most valuable companies. And it's working on interesting projects to usher in what its management calls a world of "amazing abundance."
The company's ascent proves just how much of a favorite it is among market participants. If you'd invested $10,000 in Tesla stock exactly 10 years ago, here's how much you'd have today.
Image source: The Motley Fool.
Tesla has been a monster winner. On a total return basis, its shares have skyrocketed 2,420% in the past 10 years (as of July 23), turning $10,000 into $252,400 today. If you had put that same amount of capital into an S&P 500 exchange-traded fund, you'd have $40,760 in total return right now.
The stock's biggest catalyst has been the company's phenomenal growth. From an unknown automotive start-up to an electric vehicle (EV) leader, Tesla delivered over 480,100 EVs in the quarter ended June 30. That's up from 14,400 cars in Q2 2016.
That kind of expansion supported incredible revenue gains. Tesla's top line went from $1.3 billion in the second quarter of 2016 to $28.2 billion in Q2 of this year.
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It's hard to say exactly what Tesla's operations will look like 10 years from now. But management has high hopes. The business could be collecting massive profits and cash flow from self-driving and robotics technology, as well as its energy segment.
But with the stock trading at a nosebleed price-to-earnings ratio of 343, success appears to be fully baked in.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The bearish Tesla set-up we flagged ahead of Wednesday's report has delivered most of what it can. Two ways forward: bank the entire gain, or press the same playbook against another priced-for-perfection name reporting in two weeks.
Heading into Tesla's second-quarter report, I argued the risks were skewed to the downside. Greeting a delivery beat with selling was a classic tell of expectations "priced for perfection." While revenue of $28.2 billion beat handily, up 26% year over year, adjusted earnings of 34 cents per share missed the consensus (50 cents) by a wide margin. Operating margin compressed to 1.4%, and a 142% surge in capital spending swung free cash flow negative. Combining disappointing EPS, a call for patience (this is the pattern with Tesla) on robotaxi, and the stock slid roughly 14.5% Thursday, through our short put strike, and closed near the move targeted by the trade. Investors are apparently more interested in the "show" rather than the "tell" in Tesla earnings.
Which brings us to the less glamorous but more important part of trading: what to do when a position works. Our bearish structure has captured the bulk of its maximum potential value. When most of the possible profit is already in hand, the math flips against you — what's left to earn is small relative to what you'd give back if the stock snaps back (a possibility I consider quite unlikely). So that leaves us with a couple reasonable paths:
Path one: take the money and run. Close the position, book the gain, and wait for another fat pitch. There is never anything wrong with this. There's an old saw in investing: "One never loses money taking profits." Platitudinous admittedly, but we'll reserve a more nuanced approach for another day.
Path two: bank most of it, and press. Make a similar play with "house money". Somewhat emboldened, redeploy a portion of the profits toward another high-multiple pioneering company whose valuation and price action make it vulnerable to disappointment: Palantir, which reports August 3rd.
The counterpoints on PalantirPalantir is a remarkable company, one of my favorites actually. But several counterpoints deserve weight heading into the print. The stated ambition to grow revenues tenfold without scaling the sales force is, to put it charitably, ambitious. Competition among LLM providers is likely to intensify, and enterprise customers increasingly look to deploy large language models directly rather than through an intermediary platform. The total addressable market, while large, is finite — and international sales are likely to be constrained by the understandable preference for local vendors wherever national security is concerned.
The numbers, while good, were less good last quarter. Commercial backlog growth slowed to 12% in the first quarter, per Bloomberg, down from 21% in the fourth quarter of 2025. And even net of its recent declines, Palantir trades at a material premium to its software peer group — and well above its own historical EV/sales average.
For context, the average move in Palantir from one week before earnings (about where we are now) through two weeks after (consistent with August regular way expiration) is approximately 26%!
Palantir, YTD
The options market is pricing a one-day earnings move of 9.5% — larger than the past four quarters delivered, but substantially below the long-term average of more than 14%. That suggests August options, expensive as they appear at 65% implied volatility, may be reasonably priced, particularly if you use spreads, selling one expensive option against another to neutralize the volatility premium.
So, what to do.
Step 1: Close the TSLA position — sell the August 360/330 put spread, banking at ~$23, well more than a double from the price at which we put it on.
Step 2 (for those pressing): Buy the PLTR August 21st $120/$95 put spread for ~$6.50, funded with a portion of the TSLA proceeds.
Risk is defined to the debit paid.
Max profit: the $25 spread width less the debit, if PLTR closes at or below $95 at expiration — a decline of roughly 23% from current levels, in line with the historical three-week earnings window.
The short $95 put materially offsets the 65% vol premium embedded in the long strike.
Like the Tesla trade, the Palantir put spread offers defined risk, and for those using the proceeds from the winner in Tesla, less than the "house money" (profits) collected on the first trade.
Tesla (TSLA) avoided a formal federal safety investigation into its door-release design, but regulators said the complaints exposed a broader gap in existing ve
Tesla briefly lost its $1 trillion market capitalization on Friday as shares extended losses following a disappointing second-quarter earnings report, underscoring investor concerns over the electric vehicle maker's profitability and the growing scrutiny surrounding CEO Elon Musk's long-term vision.
Tesla stock fell as much as 3.65% during Friday's session to an intraday low of $308, reducing the company's market value to approximately $996.1 billion.
The shares later recovered enough to push Tesla's valuation back above the $1 trillion mark, although the stock remained under pressure after Thursday's steep post-earnings decline.
The latest move follows a 14% plunge after the company's quarterly results, as investors reacted to weaker-than-expected profits despite stronger vehicle deliveries and rising revenue.
Tesla reported second-quarter operating profit of $398 million, down from $923 million a year earlier and well below Wall Street's expectation of $1.7 billion, according to FactSet.
The company sold around 480,000 vehicles during the quarter, up 25% year over year and roughly 80,000 more than analysts had projected.
However, weaker pricing, an unfavorable vehicle mix, lower regulatory credit sales, rising costs and higher research spending weighed heavily on profitability.
For many investors, the earnings miss itself was less significant than growing questions about whether Musk can continue to justify Tesla's premium valuation through future growth initiatives.
During the earnings call, Musk reiterated his long-term ambitions for Tesla, highlighting continued growth in robotaxis and humanoid robots while introducing the idea of the Megapod, a modular artificial intelligence data center built with Tesla hardware.
“We’re working on what we believe is the most ambitious buildout of advanced infrastructure manufacturing capacity ever in history,” he said.
Despite the earnings disappointment, Wall Street analysts largely maintained their ratings on the stock.
According to FactSet, the average analyst price target declined by only $8 to $392.
Analysts broadly characterized Tesla's elevated spending as part of a broader transition toward autonomous driving, robotics and AI infrastructure.
RBC analyst Tom Narayan maintained optimism around Tesla's robotaxi and humanoid robot opportunities while stating that nothing is “fundamentally wrong with the business.”
Tesla's valuation continues to stand apart from traditional automakers.
The company trades at roughly 175 times projected 2026 earnings, compared with an average multiple of about 24 times for the rest of the Magnificent Seven, according to the provided data.
Bill Birmingham, managing director at Rex Shares, said in a Barron's report that the valuation reflects investors' focus on future software and autonomous technologies rather than current vehicle sales.
“The valuation is already saying that investors are paying less attention to vehicle deliveries and more attention to whether high-margin software, autonomy, power, and eventually robot revenue arrive quickly enough to offset structurally lower auto margins,” he added.
Canaccord analyst George Gianarikas also maintained a Buy rating, although he reduced his price target by $40 to $410 following the earnings release.
“We have walked this Tesla tightrope before,” says Canaccord analyst George Gianarikas. “History has taught us, betting against Elon Musk is usually a fool’s errand.”
Meanwhile, Cathie Wood's Ark Investment Management used the selloff to increase its Tesla exposure.
According to the firm's daily trading disclosures, Ark purchased approximately $51.2 million worth of Tesla shares across four exchange-traded funds following the earnings release.
The window for Flight 13 opens at 6:45 p.m. EDT at Starbase, Texas.
Neither stage will be recovered, with the Super Heavy booster and Starship upper stage targeting controlled splashdowns in the Gulf of Mexico and Indian Ocean.
Traders See Launch as Near Certainty, Splashdown Less SoOn Polymarket, traders assign an 81% chance of a successful launch today, and roughly a 91% chance that Starship flies by July 31.
Traders price a 72% chance of a controlled Starship splashdown, meaning the ship survives reentry and comes down where SpaceX aims it.
Starship will attempt to deploy 20 V3 Starlink satellites, next-generation broadband units that are reportedly too large to fly on Falcon 9.
Starlink already generates the bulk of SpaceX’s revenue, but the bigger V3 satellites that would expand the network’s capacity can only reach orbit on Starship.
Six of the satellites carry cameras that will scan Starship’s heat shield prior to reentry and beam imagery to operators. SpaceX has painted several tiles white to simulate missing ones, testing whether it can verify from orbit that a ship is safe to fly home, a prerequisite for catching and reusing Starship.
Why It Matters for SPCXFull reusability is what underpins Musk’s promise of dramatically cheaper launches, the assumption baked into much of the SpaceX bull case.
The launch comes at a delicate moment for SpaceX. The stock is trading near $117 this morning, roughly 13% below its $135 June listing price, and touched an all-time low this week.
Short interest reportedly grew to 32% as Musk warned short sellers they won’t survive, and the Aug. 4 earnings call is followed by an Aug. 6 lock-up expiration freeing roughly 900 million insider-held shares.
“Starship becoming operational is the critical path to the SpaceX investment thesis,” Raymond James analyst Brian Gesuale wrote recently.
photo: Kemarrravv13 via Shutterstock
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At $319.69, Tesla (NASDAQ:TSLA | TSLA Price Prediction) stock deserves a fresh view because a disastrous Q2 earnings collided with a sky high valuation.
Tesla remains the largest EV manufacturer by volume and the most speculative AI play packaged inside a car company, with a market cap of roughly $1.40 trillion. TSLA fell 14.52% in a single session after Q2, capping a 18.25% one-week drop as investors digested collapsing margins and a cash-burning AI capex cycle.
Why Bulls Say the Selloff Is a Gift Q2 revenue landed at $28.24 billion, beating consensus by 7.10% on 25.5% YoY growth, with record deliveries of 480,126 vehicles. Energy storage deployments grew 41% YoY to 13.5 GWh, and Services revenue jumped 50%.
FSD subscriptions reached 1.48 million, up 56% YoY, the Robotaxi network is now unsupervised in seven US metros, and Optimus production lines are being installed. A $43.52 billion cash pile funds it all. Wall Street’s consensus target of $425.09 implies roughly 33% upside from here.
Why Bears Say This Is Money on Fire Non-GAAP EPS came in at $0.33, missing the $0.5367 estimate by 38.51%. Operating income fell 56.88% to $398 million, crushing operating margin to 1.4%. Free cash flow flipped negative to -$1.09 billion, an 847.95% reversal, as CapEx exploded 141.81% to $5.79 billion.
Valuation makes the miss unforgivable. TSLA trades at a trailing P/E near 316x with a forward multiple of 167x against a return on equity of 4.89%. Polymarket’s crowd puts a 71% probability on shares hitting $315 in July, and one Reddit thread titled “Tesla misses on earnings despite revenue beat” is driving the loudest post-earnings sentiment.
Why Some Argue for Patience Instead The hold case rests on optionality. Revenue growth is real, cash is abundant, and the AI, Robotaxi, and Optimus lines could eventually justify the spending. Management said “hardware-related profits to be accompanied by an acceleration of AI, software, and fleet-based profits.”
The tell will be margin recovery. If Q3 shows operating margin climbing back toward the 21.1% auto gross margin printed in Q1, patience gets rewarded. If not, holders are financing capex without earnings to show for it.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Tesla didn't make the cut. Grab the names FREE today.
What the Numbers Actually Say TSLA currently trades at $319.69, down 28.91% year-to-date while the S&P 500 is up 8.25%. The consensus price target of $425.09 implies about 33% upside, but targets lag fast-changing fundamentals.
Coverage spans 47 analysts:
Strong Buy: 5 Buy: 18 Hold: 18 Sell: 4 Strong Sell: 2 Shares sit well below the $407.47 50-day and $415.96 200-day moving averages, mirroring fundamental deterioration.
The Verdict At $319.69, Tesla looks richly valued against deteriorating fundamentals.
A 1.4% operating margin on 316x earnings is untenable. With FCF negative and CapEx guided toward a $25 billion budget, next quarter faces the same margin squeeze. Regulatory credit revenue is fading, ASPs are slipping, and warranty charges tied to a vendor cell issue add drag.
Fair value, using auto-industry earnings power rather than AI dreamware, sits closer to $180 to $210. That implies the current price still embeds significant Robotaxi and Optimus success that the crowd is fading: Polymarket puts Optimus release by year-end at just 24% and Robovan orders at 8.5%.
The thesis breaks if Q3 delivers sharp margin recovery, FSD monetization inflects, or Optimus ships on schedule. Absent those, every dollar chased above $300 is capital rented to an AI capex cycle with no proven return.
Buying a 15% dip on a stock priced for flawless execution while execution is failing is catching a knife.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Tesla didn't make the cut. Grab the names FREE today.
Tesla, Inc. (TSLA -3.01%) told investors on its Wednesday earnings call that it still plans to invest more than $25 billion on capital projects by the end of this year. The statement reaffirms guidance laid out in April, even as its Q2 profits came in well below what Wall Street expected.
Capital expenditures (capex) -- the money a company puts into factories, equipment, and other long-lived assets -- hit $5.8 billion in the quarter alone. That’s 142% more than the $2.4 billion the company spent in the same quarter a year ago.
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As of 10:20 a.m. ET on Friday, Tesla shares have fallen more than 16% since markets closed on Wednesday. The S&P 500 and the Nasdaq Composite were down about 1.3% and 2.8%, respectively, over the same stretch.
Tesla wants to build fastChief Financial Officer Vaibhav Taneja confirmed the company is on track to spend $25 billion. More increases are expected over the next two to three years, with the funds earmarked for the company’s Robotaxi fleet, AI computing infrastructure, Optimus manufacturing, and semiconductor fabrication.
CEO Elon Musk framed the strategy as speed over thrift. "We should be spending on capex as fast as we can spend, as fast as we can without it being too wasteful," he said on the call, adding, "it's OK to be a little less capital efficient if we get things done sooner."
Optimus, the company’s humanoid robot, is one of Tesla’s top priorities, with Musk having called it a $10 trillion business in the past. The company pulled its Model S and Model X production lines out of the Fremont plant to clear space for first-generation Optimus robots.
Image Source: Company Image
The first units to roll off the line won’t be headed to customers, however. Rather, "the initial Optimus builds will be used in [its] Optimus Academy for training data collection and further functionality development."
Cybercab, the company’s robotaxi, has already begun production at Tesla’s Gigafactory Texas, and Semi production is expected to ramp this year at a new Nevada plant.
Tesla’s numbers missed the markThe quarter's top line was strong. Sales topped $28.2 billion, a 26% increase from a year earlier. That was substantially higher than Wall Street had expected, but it was mostly where the good news ended.
Gross margins fell considerably from 17.2% to 16.8%. Analysts expected an increase to 19.4%. Profits slid as well: non-GAAP earnings came in at $0.33 per share versus the expected $0.51.
The bottom lineTesla is going through a major period of transition, and there are some potentially exciting things happening. The company’s robotaxis are now live in seven cities, the first Optimus robots should be coming off the line by the end of the year, and after some major hits to its sales figures last year in Europe, registrations were up sharply in June across France, Sweden, Italy, and Portugal.
That being said, I’m still a skeptic. Tesla is spending record sums on businesses that don't generate revenue yet and, despite their exciting nature, may never become real businesses. Margins are taking a beating, and the company’s CEO is running two of the largest companies around at the same time.
And even after shares have fallen more than 35% since their highs at the end of last year, they are still trading at incredible multiples.
TSLA's Q2 miss, margin pressure and heavy spending triggered a 14% slide, but stabilizing EV demand, balance sheet strength and FSD gains support a hold.
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
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His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
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TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
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Tesla, Inc. reported Q2 FY2026 earnings that triggered a 14.7% stock drop, reflecting investor skepticism over its strategic pivot. TSLA is shifting from a carmaker to an AI conglomerate, with 2026 capex set to exceed $25 billion and negative free cash flow emerging. Automotive revenues rose 8% but were driven by price cuts and incentives, compressing gross margins to 16.3% and signaling core business pressure.
July has been a horrible month for the stock prices of Elon Musk’s two publicly traded companies: Tesla (Nasdaq: TSLA) and SpaceX (Nasdaq: SPCX).
As of the close of markets yesterday, the two companies have seen their stock prices decline by roughly 24% and 31%, respectively, since June 30. Here’s what you need to know.
Tesla stock got hammered yesterdayLet’s start with Tesla, Inc. While the electric vehicle company has seen its stock price decline for most of July, the drop had been subtle, and similar to what most major tech stocks had seen across the month.
However, then yesterday came, and TSLA stock crashed more than 14.5% in a single trading session, ending the day down $54.32 to $319.69.
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So what the heck happened? In short: Tesla’s earnings happened.
Yesterday, the company revealed its financial results for the second quarter of fiscal year 2026. For the quarter, Tesla reported revenue of $28.24 billion, representing roughly 26% growth from the same quarter a year earlier.
That type of growth is nothing to sneeze at, and, as noted by CNBC, Tesla’s Q2 revenue came in well ahead of the $25.71 billion LSEG analysts were expecting.
The stock plunged 14.52% to close at $319.69—the largest one-day loss in Tesla’s history. Trading volume surged to 115.61 million shares, more than double its three-month daily average of 49.4 million shares.
Earnings Miss Was Only the BeginningTesla’s second-quarter results gave investors multiple reasons to hit the sell button.
While revenue topped Wall Street estimates, adjusted earnings of 33 cents per share fell well short of expectations as automotive margins deteriorated. Gross margin slipped below analyst forecasts, highlighting continued pressure on Tesla’s core vehicle business even as deliveries improved.
But the bigger surprise came below the income statement.
Tesla reported negative free cash flow for the first time in more than two years after capital expenditures more than doubled to roughly $5.8 billion. Management also said capital spending will exceed $25 billion in 2026 and continue climbing as the company ramps investments in robotaxis, Optimus humanoid robots, AI infrastructure and next-generation manufacturing.
Wall Street Wanted More Than AI PromisesTesla has long argued that its future valuation depends less on selling cars and more on becoming an AI and robotics company.
The earnings call reinforced that strategy, but investors appeared unconvinced that the payoff is close enough to justify the growing bill. Analysts noted that while spending plans became clearer, updates on commercialization timelines for Robotaxi, Optimus and other AI initiatives offered few new catalysts to offset concerns about mounting cash burn.
The market’s reaction suggests investors are beginning to ask a tougher question: if Tesla is entering one of the heaviest investment cycles in its history, how long will shareholders have to wait before those billions translate into higher earnings?
Thursday’s answer was painful. In a single trading session, Tesla lost more market value than Toyota is worth. And with JPMorgan and UBS joining the growing list of firms trimming their expectations, Wall Street is signaling that Tesla’s AI future may take longer—and cost more—than investors had anticipated.
Photo: TY Lim / Shutterstock
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Tesla (NASDAQ:TSLA | TSLA Price Prediction) delivered a split-decision quarter: a big revenue beat wrapped around an ugly EPS miss. Wall Street trimmed price targets without walking away from the story. Our model comes out constructive.
Tesla trades at $374.01 after a roughly 4% after-hours slide that erased $71 billion in market cap. Our 24/7 Wall St. price target is $413.49, implying 10.56% upside over twelve months. The recommendation is buy with 90% confidence level confidence.
Metric Value Current Price $374.01 24/7 Wall St. Price Target $413.49 Upside 10.56% Recommendation BUY Confidence 90% A Record Quarter That Cost $71 Billion Tesla posted $28.24 billion in Q2 revenue, up 25.52% year over year and beating consensus by 7.10%, on record deliveries of 480,126 vehicles.
Non-GAAP EPS of $0.33 missed the $0.5367 estimate by 38.51%, operating margin compressed to 1.4%, and free cash flow flipped to negative $1.09 billion as capex surged to $5.79 billion. Shares are down 5.18% this week and 16.83% year to date, though up 12.62% over the past year.
Why Bulls See a Breakout Ahead The bull case rests on Tesla’s transition to an AI and robotics platform. FSD attach rates on North American deliveries exceeded 55%, with 1.48 million active subscriptions (up 56% YoY).
Cybercab production has begun at Gigafactory Texas, robotaxi service covers seven US metros, and Optimus lines are installed at Fremont. Energy storage deployments jumped to 13.5 GWh. Our bull scenario points to $479.66 within twelve months, a 28.25% return.
The Risks Worth Watching The bear case flips the spending story. Operating income fell 56.88% YoY, opex jumped 47%, and regulatory credits collapsed to $146 million. Reddit sentiment tracked bearish (24 to 36) after the earnings report. Multiple analysts slashed the price target after earnings.
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Bulls counter that margin damage is self-inflicted, with heavy AI infrastructure and stock-based comp from the 2025 CEO Performance Award weighing on GAAP profits, while operating cash flow rose 84.9% to $4.70 billion and cash swelled to $43.52 billion. Our bear scenario lands at $365.83, a 2.19% decline.
How Tesla Compares to GM and Rivian General Motors (NYSE:GM) is the anti-Tesla trade. GM posted its 16th consecutive earnings beat, with adjusted earnings up 41.3% and raised full-year 2026 guidance, plus roughly 75 million shares retired in the past year. That execution at a fraction of Tesla’s 370 P/E is why our $413.49 target must earn its premium through AI optionality, not vehicle economics.
Rivian (NASDAQ:RIVN) is the pure-play EV comp fighting for scale. Rivian lacks Tesla’s 480,126-unit quarterly cadence and $43.52 billion cash pile, making Tesla’s balance sheet look conservative and supporting our target as reasonable rather than aggressive.
Tesla Price Prediction 2026 to 2030 Our 24/7 Wall St. price target for Tesla is $413.49, a buy with 90% confidence. Q2 shows demand strength (record deliveries, revenue beat) with misses concentrated in discretionary AI and Optimus spending Tesla chose to accelerate.
I’d buy here if capex converts into robotaxi and Optimus revenue on the 2027 timeline management outlined. I’d stay on the sidelines if operating margin fails to recover above 5% by year-end.
Year 24/7 Wall St. Price Target 2026 $413.49 2027 $445.00 2028 $475.00 2029 $505.00 2030 $538.14 These projections assume Tesla executes on robotaxi monetization and Optimus reaches commercial scale. Significant upside or downside could result from FSD adoption curves and margin recovery pace.
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Tesla Inc. (NASDAQ:TSLA) is in the spotlight Friday after a busy July that included record delivery figures, a closely watched earnings report and a sharp post-earnings selloff.
Tesla stock is showing downward pressure. Where is TSLA stock headed? Tesla Q2 Delivers 25% YoY SurgeTesla pre-released its second-quarter production and delivery figures on July 2, reporting 451,758 vehicles produced and 480,126 delivered — up 25% year-over-year and well above the roughly 406,000 Wall Street had expected. Model 3/Y deliveries totaled 467,762, with other models contributing an additional 12,364. The company also deployed 13.5 GWh of energy storage products during the quarter.
Tesla Tops $100B TTM Revenue, Stock SinksShares fell sharply following the report, extending to a 14.5% single-day decline on July 23 — Tesla’s largest single-day drop in over a year, erasing roughly $214.5 billion in market value. The selloff followed the worse-than-expected adjusted EPS result, along with company commentary on high capital expenditure growth, supply-chain bottlenecks and difficulties scaling up Optimus robot production.
The AI and Robotics PivotAnalyst Consensus & Recent ActionsThe stock carries a Buy rating with an average price forecast of $413.49. Recent analyst moves include:
UBS: Neutral (Lowers Target to $385.00) (July 23) JP Morgan: Neutral (Lowers Target to $445.00) (July 23) Morgan Stanley: Equal-Weight (Lowers Target to $400.00) (July 23) Tesla Shares Edge HigherTSLA Price Action: At the time of publication, Tesla shares are trading 0.43% higher at $321.05, according to data from Benzinga Pro.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Earlier this month, drastically improved second-quarter delivery numbers rekindled hope that electric vehicle (EV) maker Tesla (TSLA -1.39%) was back on track. The company's fiscal second-quarter results, reported after Wednesday's close, however, tainted those strong delivery figures. Here's a closer look.
Profitability pressure Yes, despite beating analysts' top-line expectations, Tesla's Q2 earnings fell short of estimates. The company turned $28.2 billion in revenue into a per-share profit of $0.33, versus analysts' consensus forecasts of $26.3 billion and $0.50, respectively.
Granted, the company is establishing or growing several different businesses with unpredictable developmental costs. These include solar panels and energy storage batteries, of course, but also robotaxis and, soon, humanoid robotics. That's why the earnings miss doesn't necessarily mean a great deal.
Image source: Getty Images.
The fact that its breadwinning electric vehicle business is showing signs of marketability strain, though, is a concern. Tesla might not be able to support the ongoing development of these other ventures from its EV operation as well as previously expected.
The graphic below tells the tale. Last quarter's total EV deliveries bounced back to 480,126 units. But these cars generated an average of $2,613 less revenue than they did just a quarter earlier. The production cost for each of the vehicles manufactured in Q2, meanwhile, grew by more than $6,000 apiece, and even ticked a bit higher based on last quarter's surging deliveries.
Data source: Tesla quarterly reports. Chart by author.
Connect the dots. Tesla is spending more to make less money on every car it manufactures or delivers.
Blame competition, mostly OK, it's not quite as alarming as last quarter's per-car metrics imply. The company was still bringing some of its capacity back online during this time, particularly in Europe, which can incur costs that don't result in immediate revenue. I'll want to see at least another quarter's worth of data before jumping to conclusions.
There's no denying, however, that Tesla has a pricing-power problem that can't simply be chalked up to selling fewer of its more expensive Model S and Model X EVs. Last quarter's price cuts coincide with the expanded availability of other electric vehicles... especially those made by China's BYD (BYDDY +1.47%), which delivered 557,090 battery-electric vehicles of its own in Q2, with many of them suddenly being shipped to Europe, where Tesla previously dominated. It would be naïve to believe the availability of these alternatives isn't taking a toll on the relative marketability -- and therefore pricing power -- of Tesla-made electric vehicles.
It's not like these rivals are suddenly going to back down either, now that they're finally finding their full stride. Look for the pricing pressure Tesla is now facing to persist.
Just tread lightly This doesn't necessarily mean Tesla's shares are un-ownable. As has been frequently pointed out, this stock is now being priced as much on its AI robotics potential as it is its electric vehicle business. This, of course, creates and maintains a premium.
Today's Change
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It also invites volatility, though, in addition to setting the stage for poor performance if the company's robotics ambitions don't pay off as well or as soon as hoped.
In other words, there's more than a little that could go wrong for this stock. Tread lightly.
Six weeks ago, Elon Musk was the richest person who had ever lived. On June 16, three days after SpaceX (NASDAQ:SPCX | SPCX Price Prediction) closed its June 12, 2026 initial public offering, SpaceX’s market capitalization hit an all-time high of $2.64 trillion, and Musk’s paper wealth peaked near $1.45 trillion. By the close on July 23, the Bloomberg Billionaires Index pegged him at roughly $738 billion. Somewhere between $650 billion and $700 billion of paper fortune has vaporized in about five weeks. He is, for the moment, still the wealthiest person on the planet by a wide margin, about $650 billion ahead of the next-richest person.
Two separate stocks are doing the damage at the same time. That is the story.
The SpaceX Round Trip SpaceX’s debut was the largest IPO in history, and the tape rewarded it accordingly: shares traded well above the offering price and pushed the rocket-and-satellite giant past a $2.6 trillion valuation within days. From the June 16 peak to the July 23 close, SPCX has fallen 41.41%, from $201.80 to $118.24. Market cap now sits at $895.24 billion. More than $1 trillion in market value has come off the top.
The catalysts arrived in sequence. A delayed Starship launch on July 16 hit the stock in extended trading. Post-IPO enthusiasm faded. A broader reappraisal of AI-linked valuations rolled through the tape. By July 21, SPCX had briefly traded below $120 a share, dipping under its IPO price after seven straight down sessions. Short sellers have booked, according to Reddit chatter cited in retail forums, $15.5 billion in profit on the slide.
Tesla’s Profit Air Pocket Tesla (NASDAQ:TSLA) provided the second leg of the drawdown. On July 22, after the close, Tesla reported Q2 revenue of $28.24 billion, beating estimates by 7.10%, alongside a record 480,126 deliveries. The problem sat below the top line. Non-GAAP EPS came in at $0.33 against a $0.5367 consensus, a 38.51% miss. Operating income collapsed 56.88% year-over-year to $398 million. Operating margin was 1.4%. Free cash flow swung to negative $1.09 billion as capex jumped 141.81% to $5.79 billion.
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The blowout in operating expense, up 47% YoY to $4.35 billion, reflects Tesla’s AI, robotaxi, Optimus and Dojo spend, plus stock-based compensation tied to Musk’s 2025 CEO Performance Award. Shares closed at $319.69 on July 23, off 14.52% on the day, 16.23% over the past month, and 28.91% year to date. Market cap now stands at $1.20 trillion.
What to Watch Two things are worth separating. The first is that Musk’s headline number is a mark-to-market figure, not a realized loss. His TSLA and SPCX stakes have not been sold; the wealth ticker moves with the tape. The second is that the underlying macro is calm. The VIX closed at 16.64 on July 22, inside its normal range. This is two idiosyncratic repricings landing on one balance sheet.
The signals to watch over the next quarter are specific. On Tesla: whether Q3 operating margin recovers off the 1.4% floor and whether capex guidance holds near the $25 billion analyst figure. On SpaceX: the lockup calendar (Reddit users have flagged a first major unlock bigger than the entire IPO float) and the next Starship attempt. If those go badly, the $650 billion number gets larger. If they go well, it shrinks fast. Musk’s fortune has always been leveraged to belief. The last five weeks are what happens when belief takes a breath.
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Item 1 of 2 A display of a Tesla Model 3 using Full Self-Driving Supervised on a highway in San Diego, California, U.S., April 15, 2026. Picture taken with a long exposure. REUTERS/Mike Blake//File Photo
[1/2]A display of a Tesla Model 3 using Full Self-Driving Supervised on a highway in San Diego, California, U.S., April 15, 2026. Picture taken with a long exposure. REUTERS/Mike Blake//File Photo Purchase Licensing Rights, opens new tab
CompaniesJuly 24 (Reuters) - The U.S. National Highway Traffic Safety Administration has denied a petition seeking a defect investigation into the emergency mechanical door release on about 180,000 Tesla (TSLA.O), opens new tab Model 3 vehicles.
NHTSA said the petition did not present evidence of a likely safety-related defect warranting an investigation and that the issue would be more appropriately addressed through an ongoing rulemaking process.
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The petition covered 179,701 model-year 2022 Tesla Model 3 vehicles and alleged the manual door release was difficult to locate after a crash if the vehicle lost power, increasing the risk of occupants getting trapped.
Tesla did not immediately respond to a request for comment.
Tesla's electronically operated door handles have faced scrutiny after several crashes in which occupants were reportedly unable to exit their vehicles after losing power, prompting broader calls for stricter federal safety standards governing emergency door releases.
The agency said it had identified one consumer complaint involving a 2022 Model 3 that alleged the mechanical door release was concealed and unlabeled after the vehicle lost electrical power in a front-impact crash. The petition cited the same vehicle.
NHTSA said the current federal safety rules governing vehicle door locks and latches do not address the labeling or location of emergency mechanical door releases.
The agency added that it has already begun a separate rulemaking process after granting approval to another petition that sought a new federal safety standard for more obvious emergency door-egress systems.
It said the broader rulemaking, rather than a defect investigation, was the appropriate way to address the issue.
Reporting by Akash Sriram in Bengaluru; Editing by Joyjeet Das and Shinjini Ganguli
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Though it left Elon Musk and other Tesla (NASDAQ: TSLA) stockholders poorer, TSLA shares’ latest plunge proved highly beneficial for one of the most prominent bears and contrarians in finance: the legendary ‘Big Short’ trader Michael Burry.
Specifically, the famous short trader revealed on Tuesday, June 30, that he made a bet against the electric vehicle (EV) company while it was trading at $416.22.
At press time on Friday, July 24, Tesla stock is changing hands at $319.69 after a 16.16% weekly drop and a 14.52% plummet following the July 22 earnings report. Overall, the EV maker is down 23.19% since the legendary short trader unveiled his position.
Tesla stock price one-month chart. Source: Google The exact scale of Burry’s profits – or whether they are realized or unrealized – however, remains unknown since the ‘Big Short’ investor refrained from revealing the size of his bearish bet.
Still, short sellers that targeted Tesla stock ahead of the company’s latest filing are estimated to have cumulatively raked in $4.1 billion, per a Bloomberg report published on July 23.
Why Tesla stock is crashing Elsewhere, TSLA shares’ latest drop is directly linked to a significant earnings miss during the second quarter (Q2) of 2026. Indeed, Elon Musk’s car company reported its earnings per share (EPS) at $0.33 while analysts were forecasting $0.51.
Additionally, while the firm beat expectations in terms of revenue – sales came in at $28.24 billion instead of $25.71 billion – and announced a recovery of its core business, its margins diminished, furthering the bearish attitude among investors.
Burry sees success on three out of four notable June 30 shorts Lastly, Michael Burry’s other three short positions unveiled on June 30 mostly appear to be paying off by press time on July 24.
Caterpillar (NYSE: CAT) stock fell 16% from $1,064.90 to $894.54 within the timeframe, and Applied Materials (NASDAQ: AMAT) is down 22.16% as its equity diminished in value from $723 to $562.80.
The final and arguably most controversial short position, however, remains a loser. Specifically, Michael Burry also made a bet against Nvidia (NASDAQ: NVDA) late last month, and NVDA stock rallied 4.33% from $200.09 to $208.76.
Featured image via Shutterstock
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A prototype of Tesla's Optimus robot. CFOTO/Future Publishing via Getty Images Elon Musk built Tesla into the world's most valuable carmaker. Now he's betting the company's future on a robot that walks on two legs.
Musk predicts its robot, Optimus, could become "the biggest product ever," with legions of the humanoid robots working in factories, doing household chores, and eventually building more robots. He even has a name for them in the plural: "Optimi."
But Tesla has yet to prove the robot can navigate the physical world or perform useful work autonomously, much less that it can be manufactured by the millions.
On Tesla's earnings call this week, Musk offered few details about Optimus and tempered expectations for how quickly production would increase. He said Tesla would begin producing its third-generation robot "soon" in Fremont in the San Francisco Bay Area.
Tesla is competing in an increasingly crowded humanoid market. Agility Robotics, which plans to go public, has deployed its Digit robot across nine customer facilities, while Figure AI has announced deployments in logistics and distribution centers this year. Sunday Robotics, 1X, and Weave Robotics are preparing to ship robots into homes this fall.
Guy Hoffman, an associate professor of mechanical and aerospace engineering at Cornell University who leads its human-robot collaboration lab, called humanoids a "fantasy product."
Autonomous cars took about 20 years to reach the market after the technology was first shown to work, he told Business Insider. Building humanoids is even harder, and a fully autonomous machine has yet to be developed.
"Humanoid robots are a very risky bet," Hoffman said. "I don't see the product having a viable future in the near term."
Tesla's first-generation Optimus production line in Fremont, California. Tesla Musk has never shied away from moonshot projects. But even he has acknowledged that Optimus is harder to develop than Tesla's Model X, Cybertruck, or gigafactories. If Tesla pulls it off, Musk believes Optimus could usher in "sustainable abundance," a future in which AI and robotics make human labor largely optional.
Tesla did not repond to a request for comment from Business Insider
Here's everything we know about Optimus so far:
From human to humanoidMusk introduced the "Tesla Bot" in 2021 with a person dancing in a robot costume.
Three years later, Optimus robots danced, served drinks, and spoke with guests at Tesla's "We, Robot" event. The robots walked on their own, but more complex movements, such as pouring drinks, handing out desserts, and interacting with attendees, were assisted by remote human operators.
Tesla hasn't yet revealed what the next version of Optimus will look like. All we know is that it stands nearly six feet tall and has a humanlike design, a form that one Silicon Valley investor dismissed to Business Insider as a "parlor trick". Musk has defended humanoids, arguing that robots must resemble people to perform the full range of human tasks.
Chinese companies, including Unitree and UBTech, accounted for about 90% of humanoid shipments last year, according to technology research firm Omdia. Musk has argued that Optimus will be much more sophisticated than its Chinese rivals, but has shared few details so far.
"Optimus is designed to have a lot of intelligence and to have the same electromechanical dexterity, if not higher, than a human," Musk said on a podcast earlier this year. "Unitree does not have that."
Where Optimus stands nowEven though Tesla has not publicly unveiled the next-generation Optimus, it released photos this week of the Fremont production line, where manufacturing is expected to begin soon. Musk previously said that Tesla was keeping the robot under wraps to prevent competitors from copying its design.
Tesla stopped producing the Model S and Model X in Fremont earlier this year to make room for an Optimus line designed to eventually produce a million robots a year. A second line under construction in Austin is planned to have an annual capacity of 10 million robots.
Tesla's first-generation Optimus production line in Fremont, California. Tesla The first bots will join Tesla's "Optimus Academy," where they will practice tasks and generate data used to improve the AI models that serve as their "brains." Musk has said that 10,000 to 30,000 robots will refine their real-world skills at the academy.
On the company's earnings call this week, AI chief Ashok Elluswamy said that the training could push the robots' capabilities to a "superhuman level."
Musk cautioned investors this week that production will ramp slowly because there is no established supply chain for many Optimus components.
Tesla has three big problems to solveTo make Optimus a reality, Musk says Tesla must solve three problems: intelligence, hands, and mass production.
First, the robot must learn to understand and move through the physical world. Musk believes Tesla's self-driving work gives it a head start because Optimus can use Tesla-designed AI chips and technology developed to help its cars interpret camera footage.
Tesla has adapted its driving simulator, a virtual environment used to train and test its self-driving technology, to train millions of virtual robots. But simulations cannot capture every real-world scenario, so Tesla also needs data from physical tasks. Tesla employees have recorded themselves performing factory jobs, for instance.
Hoffman, the Cornell professor, said Musk is underestimating how much harder humanoid robotics is than self-driving.
"It's like playing checkers versus doing nuclear physics," he said. Humanoids must balance on two legs without falling, he added, and today's AI models are still far from operating reliably in the physical world.
The second challenge is what Musk calls the "hands problem": replicating the human hand with motors, sensors, and software. A robot hand must combine strength, precision, and flexibility in a remarkably small space, making it exceptionally difficult to engineer.
Tesla has not unveiled the latest version of Optimus to prevent competitors from copying its design. Costfoto/NurPhoto via Getty Images On Tesla's earnings call this week, Musk said Optimus is being designed to have "human and then superhuman dexterity." Achieving that has required Tesla to develop custom motors, gears, and sensors.
The final challenge is scaling up manufacturing. Musk has warned that early production will be "agonizingly slow." But once Tesla starts producing a million robots a year — the timeline for which is still unclear — he estimates each Optimus could cost about $20,000 to $25,000 to produce.
How Optimus fits into Musk's AI empireMusk has increasingly talked about a "convergence" across his business empire, which is becoming more intertwined around AI.
Ahead of and during Tesla's earnings call this week, shareholders and analysts pressed Musk about a rumored merger with SpaceX. Musk wouldn't comment on the speculation, but highlighted the company's synergies, including the Robotaxi and AI businesses.
Musk has previously explained how Optimus could work with SpaceX's technology, which acquired xAI in February. Each robot would have enough computing power to perform some tasks independently, while xAI's Grok could coordinate larger groups, he said.
"Let's say you wanted to build a factory," Musk said earlier this year. "Grok could organize the Optimus robots, assign them tasks to build the factory floor to produce whatever you want."
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Rya is a senior reporter at Business Insider covering physical AI and robotics. She writes about factory automation, humanoid robots, and the race to collect the real-world data needed to bring AI into the physical world. She previously worked at The San Francisco Standard, where she reported on tech culture and autonomous vehicles. She has a bachelor’s degree in history and politics from Pomona College and a master’s in history from the University of Cambridge. Rya lives in San Francisco. Contact her at [email protected] or on Signal at rjetha.07. Use a personal email address, a nonwork WiFi network, and a nonwork device. Here's our guide to sharing information securely.
