A strange thing is happening with Tesla (TSLA 2.18%) right now. The company posted the best delivery quarter in its history, and the stock fell 7% in a day, its worst session in close to a year. Days later, a single city launch of a driverless taxi service sent the shares up by a similar amount.
Read those two moves together, and you get the real story: The market has stopped paying Tesla for its cars.
Image source: Getty Images.
On July 2, Tesla reported 480,126 vehicle deliveries for the second quarter, a 25% jump from a year earlier and a wide beat of the 406,000 that analysts on Wall Street had modeled. Production reached 451,758 vehicles, and the energy division deployed 13.5 gigawatt-hours of storage, above the 9.6 posted a year ago.
By any plain reading, that is a strong report. The stock sold off despite the beat, and it has dropped on each of the past three delivery updates.
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Part of the explanation sits inside the quarter. Much of the demand traces to a spike in gasoline prices tied to conflict in the Middle East, a tailwind that faded once oil prices settled. A share of Tesla's truck and battery sales runs through related parties: Musk's Space Exploration Technologies (SPCX 1.02%), or SpaceX, bought $269 million of Tesla Megapacks in April to power the data centers behind its xAI unit, after buying Cybertrucks the year before. Demand that leans on the founder's other companies is harder to bank on.
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The market is valuing Tesla as an AI company The clearest signal came the following week. Tesla widened its robotaxi service to Miami, its third U.S. market, and the shares rallied, closing near $420 on July 6. A delivery record dropped the stock; a robotaxi city lifted it.
That gap tells you where the value lives. Musk has steered the company toward its Cybercab, the Semi truck, and the Optimus humanoid robot, and he chose to end production of the flagship Model S and Model X to free the Fremont lines for Optimus.
This shift raises the stakes. If Tesla is priced as an autonomy and robotics company, the car business becomes a bridge rather than the destination, and a stumble on that bridge counts.
Competition from BYD and other Chinese makers keeps pressuring prices. A Tesla Semi was involved in a fatal crash in Nevada in late June, a reminder that autonomy carries safety and legal exposure. And a robotaxi in three cities is just a pilot, still not a business.
Investors need to watch the right scoreboard. Delivery beats will move the stock less than progress on robotaxi expansion, Cybercab volume, and Optimus. Tesla reports full financial results on July 22.
To me, that is the moment to test whether the AI story has supporting numbers.
Tesla stock (TSLA) fell on Wednesday as investors continued to look past the electric-vehicle maker's core automotive business and instead focused on the company's long-term artificial intelligence ambitions.
Shares were down 2.2% at $393.91 in midday trading after falling 4% on Tuesday.
The S&P 500 declined 0.8%, while the Dow Jones Industrial Average lost 1.5%.
AI remains the primary focus for investorsDespite reporting stronger-than-expected second-quarter deliveries earlier this month, Tesla's shares have remained under pressure.
The company recently reported stronger-than-expected second-quarter deliveries, selling about 480,000 vehicles worldwide, roughly 70,000 more than Wall Street had projected and 25% higher than a year earlier.
Even so, Tesla shares have declined since the delivery report and remain down about 10% for the year.
Investors continue to place greater emphasis on Tesla's long-term AI strategy, particularly the expansion of its robotaxi network and development of its Optimus humanoid robot.
Tesla launched its AI-trained robotaxi service in Austin about a year ago and now operates across three states.
Investors are waiting for the autonomous ride-hailing business to begin generating meaningful revenue and earnings.
The company is also developing the third generation of its Optimus humanoid robot, another project viewed as central to Tesla's long-term growth story.
For many investors, progress in robotaxis and robotics is expected to have a greater impact on Tesla's valuation than incremental improvements in vehicle sales.
Separately, JPMorgan analyst Rajat Gupta said on Tuesday that a potential merger between Tesla and SpaceX appears "strategically coherent on paper" but would face significant regulatory and governance challenges.
According to Gupta, combining the two Elon Musk-led companies would unify leadership across businesses spanning artificial intelligence, robotics, transportation, energy, and space, while leveraging shared assets such as the Terafab semiconductor facility.
The analyst noted that SpaceX recently completed a record initial public offering that raised approximately $85 billion at $135 per share, valuing the company at around $2 trillion. Tesla's market capitalization is approximately $1.25 trillion.
Gupta said SpaceX's public listing provides valuable acquisition currency but identified several obstacles to any potential transaction.
He cited China as a major regulatory challenge because of SpaceX's US government and defense contracts alongside Tesla's extensive manufacturing operations in the country.
The analyst also highlighted governance concerns, noting that Musk controls roughly 85% of SpaceX's voting power but about 20% of Tesla's, potentially complicating any merger and raising dilution concerns for Tesla shareholders.
Gupta added that the size difference between the two companies could make the transaction resemble a SpaceX acquisition of Tesla rather than a merger of equals.
Even without a formal combination, the analyst said operational ties between the companies are already extensive through shared engineering talent, artificial intelligence infrastructure, and the Terafab facility in Texas.
SpaceX’s executive compensation filing reads unlike anything in the history of SEC paperwork. The word “Mars” appears 63 times, including inside the formal executive compensation section, and the document contains a quote from Isaac Asimov. Reporters who reviewed it noted no real precedent in the history of executive compensation. The legal condition for CEO Elon Musk’s payday is a permanent human colony on Mars with at least 1 million inhabitants.
The $165 Billion Structure The SpaceX (NASDAQ:SPCX) board granted Musk 1 billion restricted shares of Class B common stock, on top of his existing stake of roughly 5 billion shares worth about $825 billion. The package is worth about $165 billion at the SpaceX share price referenced in the filing.
Two conditions must be met simultaneously for each tranche to vest: 15 escalating market-cap milestones up to $7.5 trillion in company value, paired with corresponding “human colony milestones” tied to Mars population. Both triggers, together, per tranche.
An employment clause seals the structure. Musk must still be running SpaceX when the board certifies the milestone; if he leaves before a million people live on Mars, he gets nothing. Musk previously said his motivation for the Tesla package was control: “If I go ahead and build this enormous robot army, can I just be ousted at some point in the future? That’s my biggest concern.”
Why xAI and X Are Now “Mars Infrastructure” Three months before the filing, Musk merged xAI and X into SpaceX; the deal valued SpaceX at $1 trillion and xAI at $250 billion. The filing reframes both as prerequisites for a Martian settlement: autonomous robots to build habitats, AI able to operate independently given the roughly 20-minute Earth communication lag, and Starlink-scale connectivity.
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What Traders Actually Think Prediction market traders on Kalshi give SpaceX less than a 20% chance of successfully sending humans to Mars by 2030, let alone building a million-person colony. SpaceX has not specified a colony timeline, citing still-unproven technology. Uncrewed cargo flights to Mars are targeted as early as 2028, with Tesla’s Optimus robots as potential early payloads, while the Starship that would carry a million people is still in test flights.
SPCX Has Been Falling in Recent Weeks SPCX listed on June 12, 2026 and closed at $149.47 on July 7, 2026, down 7.13% since debut and 12.52% over the past week. NASA Administrator Jared Isaacman has said he has “no issue with important partners to NASA being well-capitalized”. Governance overseers have been quieter: no proxy advisory firm has reviewed a package conditioned on interplanetary colonization, and Norway’s sovereign wealth fund, which opposed the Tesla package citing “total size of the award, dilution, and lack of mitigation of key person risk”, now faces the same questions on a bigger canvas.
The Full Musk Compensation Picture On June 16, 2026, Musk exercised his 2018 Tesla (NASDAQ:TSLA | TSLA Price Prediction) pay package: 304 million options generating about $116 billion in gains in a single transaction, the largest equity event in corporate history. In November 2025, Tesla shareholders approved a separate $1 trillion pay package, currently worth about $178 billion. Bloomberg tallied Musk’s total 2025 Tesla compensation at $158 billion. Tesla cites “CEO award SBC” as a driver of operating expenses in its Q1 2026 filing, with the stock at $402.90 on July 7, 2026 and the stock down 10.41% year to date. Add the potential $165 billion from the Mars award, and the combined package would be the largest potential payday in human history.
Incentive Structure or Marketing Document? A compensation document that reads like a mission statement is also a marketing document. Some coverage suggested the Mars-linked award may have been designed partly to generate excitement around SpaceX going public. The bull case: if you believe humans will reach Mars in your lifetime, this structure aligns Musk with the mission more completely than any pay package ever designed. The bear case: a package conditioned on an event traders give under 20% odds of happening by 2030 has legal standing without operational meaning. The real question for anyone reading the S-1 today is whether buying SPCX at roughly a $1 trillion valuation is the right way to bet on the possibility that a million people might live on Mars in Musk’s lifetime.
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Tesla (TSLA 2.93%) stock is down about 7% on the year and off more than 15% from its 52-week high, as of this writing. However, things could be looking up after a dose of good news to start the month.
First, the company announced that it had delivered 480,126 vehicles in the second quarter. This was well above the 406,000 deliveries expected by analysts, as compiled by StreetAccounts. That was also much higher than the approximately 384,000 vehicles it delivered in Q2 of last year. The outperformance appears to be largely driven by Europe, with Deutsche Bank forecasting a 40% increase in the region during the quarter. Cox Automotive, meanwhile, estimated that U.S. deliveries dropped 20%.
Image source: The Motley Fool.
After the Fourth of July holiday weekend, Tesla announced on social media platform X that its robotaxi services were now available in Miami. According to Electrek, these services are only available in a small zone, with no service in areas like downtown Miami, the airport, and most of Miami-Dade County.
The improvement in deliveries is good news for Tesla, as its primary electric vehicle business has been struggling. However, it is still facing headwinds in the U.S. (loss of the federal EV tax credit) and in China (fierce competition), and the uptick in Europe could have stemmed largely from higher gas prices following the closure of the Strait of Hormuz. Because of this, there is no guarantee that this uptick is sustainable, and it may be more of a one-off pickup in demand.
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Meanwhile, much of Tesla's valuation is still tied to its robotaxi ambitions. While it is encouraging that the company is expanding beyond Austin, the area it is operating in around the Miami area is still very geofenced. At the same time, the company's operations in Austin remain a work in progress, with Electrek reporting that it only has around 14 unsupervised robotaxis in operation, down from a peak of 25 vehicles.
The reason for the slow expansion appears to be safety concerns. The NHTSA (National Highway Traffic Safety Administration) has reported several crashes, while independent data points to Tesla's robotaxis having a crash rate almost four times that of human drivers. While Tesla's camera-only tech is cheaper and would give it a cost advantage, its safety record is worse than the records of competitors, such as Alphabet's Waymo, that use lidar.
With the stock trading at a forward price-to-earnings of nearly 200 times and still struggling with its robotaxi ambitions, I'd stay on the sidelines. However, I think a potential acquisition by SpaceX likely limits some of the downside in the stock.
ToplineMeta edged past Tesla in market value Wednesday—not because Meta's stock rose, but because Tesla's fell harder—setting up Meta’s earnings report later this month as a test of whether the tech giant’s big spending on artificial intelligence is paying off.
Meta shares topped Tesla's market value by more than $50 million.
Photo illustration by Cheng Xin/Getty Images
Key FactsMeta’s total market value crossed above Tesla’s on Wednesday, with Meta shares trading at $605.16 as of 1:25 p.m. EDT—giving the company a market value of over $1.5 trillion.
Meta shares were down 1.7% on the day even as the milestone was reached, while Tesla's stock slid over 2.3%, handing Meta the lead in market value by default rather than through any gain of its own.
Meta has traded between $520.26 and $796.25 since last July and is now roughly around the middle of that range, well below the peak it reached last year.
BNP Paribas analyst Nick Jones told Benzinga that Meta investors looking toward the company’s earnings report this month will likely focus on how much the company is spending to build AI products and whether a planned cloud computing business—selling spare computing power to outside companies—can become a meaningful new revenue source.
What To Watch ForMeta’s next earnings report on July 29 will allow management to address how much it plans to spend on AI infrastructure in the second half of the year and whether its fledgling cloud computing business has any paying customers yet. Tesla will also face its own test on July 22, when the carmaker’s latest earnings will be published.
Big Number12.3%. That is how much Tesla shares have fallen since the start of the year, when they traded around the $438 mark. Meta shares have dropped 8.5% in that same period.
Key BackgroundMeta’s stock has dropped close to 25% from the all-time high of $796.25 it reached in August. A global tech rout gripped the market last month amid concerns a massive spike in AI spending may not translate to proportional revenue. Companies like Tesla, Nvidia, Intel, AMD and Broadcom suffered losses. However, some optimism remains around the industry. Erste Group upgraded Meta on Tuesday while Wells Fargo raised its price target to $767 on July 2, citing another quarter of robust ad growth. Tesla’s slide, meanwhile, has its own critics, with analysts at Seeking Alpha pointing to four consecutive years of stagnant vehicle sales and growing competition from Chinese electric-vehicle makers as reasons the stock's valuation looks hard to justify. Tesla shares have fallen roughly 21% since they recorded an all-time high in December.
Further ReadingGlobal Tech Rout—Nvidia, Tesla, More—Hits Markets: Here’s What Fueled The Selloff (Forbes)
Tesla (NASDAQ:TSLA | TSLA Price Prediction) is the most polarizing stock in the S&P 500. Automotive gross margin snapped back to 21.1% in Q1 2026 from 16.2% a year earlier, FSD active subscriptions hit 1.28 million (+51% YoY), and shares still sit down 6.66% year to date at $419.77. The question is whether Tesla can trade at $700 by July 2029, roughly three years from today.
Why Tesla Shares Are Stuck Despite Margin Recovery The market is worried about two things. First, Q4 2025 vehicle deliveries fell 16% YoY to 418,227 units and automotive revenue dropped 11%, so the core business is not obviously growing.
Second, operating expenses are surging. OpEx grew 37% YoY in Q1 2026 as AI R&D swallows every incremental dollar of gross profit. With a beta of 1.802, Tesla amplifies every macro wobble. Prediction markets currently assign a 70% probability to a down day today.
Wall Street Sees Almost No Upside. Our Model Sees More. Consensus is uninspired. The analyst target of $423.40 implies essentially zero return from today, with 5 Strong Buys, 18 Buys, 18 Holds, 4 Sells and 2 Strong Sells. That is 49% bullish, 38% neutral.
Our 3-year framework is more constructive. The base case lands at $488.85, the bull case at $627.76, with 90% confidence. Services revenue grew 42% YoY to $3.75 billion, and unsupervised Robotaxi rides just launched in Dallas and Houston. That is a different business than 2023 Tesla.
The Path to $700 Per Share Reaching $700 from today’s price of $419.77 would require a gain of 66.8%. With forward EPS of $1.90, a price of $700 implies a forward P/E of 368x. Our base case of $488.85 already implies 232x, meaning the bold target requires additional multiple expansion on today’s forward earnings.
That sounds absurd until you remember the number that matters is 2029 EPS, not 2026. If Cybercab, Tesla Semi, and Megapack 3 hit volume production in 2026 as management has guided, the forward multiple compresses naturally as EPS climbs.
Q1 2026 operating income of $941 million (+136% YoY) and record free cash flow of $6.22 billion for FY 2025 (+73.69% YoY) show the earnings engine is turning. Management stated that “hardware-related profits are expected to be accompanied by an acceleration of AI, software, and fleet-based profits.”
The primary risk is that Robotaxi expansion stalls under regulatory friction, with markets pricing only an 11.5% probability of a California launch by year-end 2026.
Where Tesla Trades Today vs Its Earnings Power At $419.77 against forward EPS of $1.90, Tesla trades at roughly 220x forward earnings. Shares sit 15% below the 52-week high of $498.83 and well above the 52-week low of $293.55.
Longer term, Tesla has returned 2,804.58% over the past ten years. The valuation only works if you underwrite AI, autonomy, and energy as separate profit streams by 2029.
Can Tesla Really Hit $700? My Verdict Hitting $700 by 2029 requires a 66.8% gain, and I think it is a stretch rather than a base case.
Three things need to go right: Cybercab and Semi reach real volume, Robotaxi scales beyond the current Dallas and Houston footprint, and automotive gross margin holds above 20%. A regulatory setback in the US or China derails the thesis. We’ve outlined the blueprint for how Tesla could reach $700 in 2029.
Tesla (NASDAQ:TSLA | TSLA Price Prediction) and BYD (OTC:BYDDF) sit at opposite ends of the electric vehicle capital cycle. Tesla just posted Q1 revenue of $22.39B alongside surging AI spending, while BYD keeps compounding units and cash. The contrast has rarely been sharper, and the market is finally pricing it.
Robotaxi Theater Meets Export Reality Tesla’s Q1 FY2026 print showed automotive gross margin expanding to 21.1% from 16.2% and FSD active subscriptions of 1.28M, up 51% YoY. Yet operating expenses jumped 37% year over year on AI R&D and CEO stock-based comp, and free cash flow was just $1.44B against $2.49B in CapEx. That is a company funding a moonshot from a shrinking runway.
BYD, in contrast, entered 2026 with an upgraded export target of 1.5 million units, anchored by its vertically integrated Blade Battery supply chain. Shares are up 14.31% over the past week as global order visibility firms. Tesla, meanwhile, is down 10.41% year to date.
Capital Guzzler Versus Cash-Flow Compounder Tesla’s FY2025 capital story tells the tale. Operating cash flow of $14.7B was gutted by $8.5B in CapEx, and net income collapsed to $3.9B, down roughly 46% from 2024. Stock-based comp swelled to $2.8B. Management is now steering into a $25 billion 2026 CapEx budget that pushes free cash flow negative for the balance of the year.
Lens Tesla BYD Core Bet Robotaxi, Optimus, FSD subscriptions Vertically integrated EV exports Forward P/E 200 Materially lower on global consensus Key Vulnerability Capital burn, SBC dilution China tariff and geopolitical drag Tesla trades at a trailing P/E of 382 on operating margin of 4.2%. That valuation rests on promises rather than the hardware business underneath.
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The Next Test Is Whether Robotaxis Actually Ship Prediction markets are unusually blunt here. Polymarket traders assign only a 10.5% probability that Tesla launches robotaxis in California by December 31, 2026, and just 13% odds on an Optimus release by year end. That is a crowd calling the timeline aspirational. Analyst consensus target sits at $423, barely above the $402.90 close.
I will be watching whether Tesla can convert Cybercab pilot production into revenue before the CapEx bill lands. For BYD, the question is whether Europe and Southeast Asia absorb the export ramp without triggering fresh tariff walls.
Why the Setup Favors BYD Here If you want capital efficiency and units on the road today, BYD is the cleaner story. Its cash generation funds its own expansion, and the export ramp is happening in real time. Tesla still deserves a seat at the table if you believe in autonomy at scale, but paying 200 times forward earnings for that belief feels rich when insiders are net sellers and free cash flow is compressing. I would rather own the cash-flow-positive global scaler and revisit Tesla when the CapEx cycle breaks. Skepticism, in this pair, is the position.
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It's no secret that Tesla (TSLA 1.86%) is one of the most narrative-driven stocks in the market. The company's valuation hinges less on its revenue and profitability numbers, and more on whether investors believe it will successfully evolve into an artificial intelligence (AI) platform business with product lines spanning autonomous vehicles and humanoid robotics.
The bull case centers on Tesla scaling up its production of self-driving vehicles and proving that there is a market for its humanoid Optimus robots. These innovations aim to create entirely new revenue streams far larger than the electric vehicle (EV) and energy storage businesses that dominate its financials today.
On the other hand, the bear case emphasizes that those same projects have experienced repeated delays and are incurring mounting capital expenditures with little in the way of near-term returns, while Tesla's core EV business has yet to demonstrate durable pricing power or margin expansion.
Tesla's second-quarter earnings report is slated for July 22, and growth investors may be wondering how the stock will react to that data readout, particularly given the polarized views about Elon Musk's ambitious vision for the company.
Image source: Getty Images.
Tesla crushed Q2 EV delivery estimates, but questions remain Earlier this month, Tesla published its vehicle delivery figures for the second quarter. The company delivered 480,126 vehicles, comfortably ahead of the 406,024 consensus among sell-side analysts. All told, deliveries rose by 25% year over year and 34% sequentially. The company's energy storage deployments of 13.5 gigawatt-hours further underscored its momentum outside the EV business.
These figures were positive signals regarding Tesla's top-line automotive revenue. With nearly 74,000 more vehicles delivered than Wall Street expected, even conservative average selling prices should translate to a meaningful beat on automotive revenue.
However, the absence of pricing details means investors cannot yet fully judge whether accelerating revenue will translate into expanding gross margins. If a higher proportion of lower-priced vehicles were sold, or if leasing activity increased, that could have diminished the company's revenue upside.
How does Tesla stock usually react after an earnings report? The chart below illustrates Tesla's stock price action over the last three years. Earnings releases are indicated by the purple circles with the letter "E" in the middle. The trends reveal a consistent pattern of sharp reactions from the market each time Tesla's quarterly results and guidance are digested.
TSLA data by YCharts.
Shorter-term movements immediately after the company reports have tended to be particularly pronounced. Several earnings reports across 2024 and 2025 were followed by gains of 15% to 25% over the next 30 days when Tesla's guidance was viewed favorably. At other times, particularly when the stock was already near a peak, the reports triggered pullbacks of 10% or more within the next month.
The chart makes it clear that Tesla stock rarely trades sideways after an earnings report. The market's ongoing shifts in sentiment around autonomous vehicles and AI robotics tend to amplify the impact of any surprise -- positive or negative -- in management's commentary.
Where will Tesla stock trade after the next earnings report? Given that Q2's EV delivery beat is already public knowledge and the stock's tendency to make outsize moves, Tesla shares are likely to trade in a wide range in the days and weeks following the July 22 report.
I think a reasonable base-case forecast points to the stock fluctuating between roughly $365 and $455 over the next month. This means I think Tesla stock will decline by at least 10% by the end of July before any signs of recovery materialize.
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Keep in mind that downside pressure could easily intensify if Tesla's operating expenses or capex guidance point to continued heavy investment in AI infrastructure without corresponding near-term revenue visibility. Conversely, any talk from Musk that touches on robotaxi deployments, Optimus production, or progress toward Full Self-Driving could trigger another of the familiar narrative-driven surges that have repeatedly lifted the stock by double-digit percentages.
History shows that even a single optimistic remark from Musk about autonomous driving or AI can temporarily override the impact of a mixed financial performance and send Tesla stock sharply higher. However, smart investors understand the opposite is equally true: Conservative commentary about product timelines or profit margins can lead to heavy sell-offs.
For these reasons, investors should prepare for elevated volatility rather than a single decisive directional move once Tesla's full picture emerges later this month.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of TSLA, RIVN 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.
In contrast to most other recent Wall Street analyst notes, RBC Capital’s Tom Narayan upgraded his outlook for Elon Musk’s electric vehicle (EV) company, Tesla (NASDAQ: TSLA), on July 7.
Specifically, the institutional expert assigned a ‘Buy’ rating for TSLA stock while increasing his 12-month price prediction from $475 to $500.
Notably, while the analyst estimated that the ‘Robotaxi’ represents a robust opportunity with a $4.2 trillion total addressable market, it would appear much of the lift can be attributed to a potential SpaceX (NASDAQ: SPCX) acquisition scenario.
Elon Musk has been implementing something of a company rollup as part of which his artificial intelligence (AI) company, xAI, acquired his social media firm, X, before itself getting bought by SpaceX ahead of the record-breaking initial public offering (IPO).
The process, started in earnest early in 2025, led some observers to speculate that the trillionaire’s biggest two companies could soon merge as well.
RBC Capital offers rare July bullish outlook for Tesla stock
Elsewhere, RBC Capital’s note appears to have followed a different approach from most other Wall Street analysts. Out of the five notable revisions provided in July, four – all except for Narayan’s – positioned Tesla stock as a ‘Hold.’
Among them, Morgan Stanley’s (NYSE: MS) Andrew Percoco was the most bearish, having forecasted TSLA shares would stand at $415 in 12 months on July 6, while JPMorgan’s (NYSE: JPM) Rajat Gupta was the most optimistic of the ‘Neutral’ experts with a $475 forecast on July 7.
The overall souring of the mood can arguably be attributed to an overall decline in Tesla’s core car business, shifting goalposts for the ‘Robotaxi,’ and the overall downward stock market performance of the EV maker in 2026.
Specifically, TSLA shares are, at their latest closing price of $402.90, 8.03% down year-to-date (YTD).
Tesla stock price YTD chart. Source: Google Analysts set Tesla stock price target for the next 12 months Lastly, the overall July balance of ratings is largely in line with the wider Wall Street attitude toward Elon Musk’s car company. Tesla is generally considered a ‘Hold’ by institutional analysts, with 15 out of the 28 experts who voiced their opinions in the last three months seeing it as such.
Wall Street sets Tesla stock price target for the next 12 months. Source: TipRanks Additionally, TSLA stock is, on average, expected to retrace 0.79% to $399.71 in the next 12 months, per the data Finbold retrieved from TipRanks on July 8, 2026.
Featured image via Shutterstock
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Tesla stock NASDAQ:TSLA remained under pressure as Wall Street debated whether a future tie-up with SpaceX could reshape the company’s valuation story.
TSLA closed around $402.90, down over 4% on Tuesday and was red in pre-market trading on Wednesday.
The downward push came despite recent delivery data improving sentiment around the electric-vehicle maker.
The new debate is bigger than cars.
After SpaceX’s record $75 billion IPO at a $1.77 trillion valuation, investors are asking whether Elon Musk’s companies could eventually be folded into one broader AI, robotics, energy, transport and space platform.
JPMorgan is not dismissing the Tesla-SpaceX merger idea, but the firm is also not treating the possibility as a simple reason to buy Tesla stock.
JPMorgan analyst Rajat Gupta said a combination would be “strategically coherent on paper.”
The logic is easy to understand as Tesla brings electric vehicles, batteries, autonomy software and robotics.
SpaceX brings launch systems, Starlink, satellite infrastructure, space-based AI ambitions and deep government-linked aerospace capabilities.
Together, they would look less like two separate Musk companies and more like a single industrial technology platform.
The problem comes at execution stage as Gupta flagged substantial regulatory and jurisdictional hurdles, with China standing out as a key complication.
Tesla has major manufacturing and sales exposure in China, while SpaceX operates in sensitive areas such as satellites, defence-linked infrastructure and space communications.
That mix could make approvals politically difficult.
That is why the JPMorgan note reads more like an “interesting thesis” than a clean buy signal.
Gupta kept a Hold rating on Tesla, while Wall Street’s broader view also remains cautious, with a Hold consensus and an average price target of $399.71, slightly below recent trading levels.
The JPMorgan call gives bulls a new story to trade, but it also gives sceptics a fresh reason to worry about governance, regulation and execution risk.
RBC Capital Markets is taking a more constructive view.
RBC analyst Tom Narayan raised his Tesla price target to $500, incorporating a 25%-30% premium to current trading levels based on a potential SpaceX acquisition scenario.
Narayan’s argument is that closer collaboration between the two companies could unlock value across compute hardware, energy storage, AI training and large-scale infrastructure.
That gives investors a clear bull-versus-cautious split. RBC sees a possible valuation unlock, while JPMorgan sees strategic coherence, but also major complexity.
The analyst's logic may support the long-term “Musk ecosystem” bull case, but it clearly does not settle the buy-now debate.
For TSLA to look more compelling in July, investors need confirmation from Q2 earnings that Tesla’s core business, energy segment and AI ambitions are strengthening, not just another speculative merger angle.
The long-wheelbase Model Y L adds a usable third row with a negligible range penalty, but its $61,990 Launch Series price undercuts no one.
Tesla Stretches Its Model Y for a Roomier Third Row, Extending the Price Even More Why now? What's different from the standard Model Y Fighting on two fronts Tesla has added an actual, reasonable third row of seats to its Tesla Model Y. The automaker brought a long-wheelbase variant of the Model Y electric SUV to its US lineup, shoring up a gap in its fleet and bracing the brand against new electric SUV competition.
The Model Y L Premium Launch Series quietly opened for order at Tesla's website and dealerships last week, priced at $61,990 for the new six-seat configuration.
This longer Model Y isn't exactly new to the world -- it originally debuted as a Chinese exclusive model in mid-2025 -- but this is the first time it'll be available in North America.
Why now? Earlier this year, Tesla announced its intent to discontinue its three-row Model X electric SUV alongside the Model S sedan, refocusing its Fremont, California, factory on the development of its Optimus humanoid robot. Sunsetting the Model X leaves Tesla with nothing to challenge the Rivian R1S, Kia EV9, Hyundai Ioniq 9 and Cadillac Vistiq in the highly lucrative full-size, three-row SUV class. Meanwhile, Rivian's new R2 just pulled up into the midsize electric SUV space, ramping up deliveries to customers last month and boasting more space for people and cargo than Tesla's Model Y.
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The Model Y L adds about 6 inches to the midsize SUV's wheelbase.
TeslaBringing the existing long-wheelbase Model Y L here, to Tesla's home market, allows the automaker to shore up the shortcomings on two fronts (both a true three-row and midsize SUV) with one car, without incurring outsized R&D costs and with minimal factory retooling. Beyond a mild facelift, the Model Y chassis hasn't been updated significantly since its 2019 debut, so this isn't the most exciting move for those hungry for the next new thing from Tesla.
What's different from the standard Model Y The L stretches the Model Y platform in three dimensions. Overall, the EV is around 7.6 inches longer than the now-familiar SUV at 195.9 inches bumper-to-bumper and 1.7 inches taller (65.7 inches). More difficult to tell from the curbside, the Model Y L is also around 212 pounds heavier, tipping the scales at around 4,600 pounds. Most significantly, the EV's wheelbase grows by 5.8 inches to 119.7 inches between the axles.
Tesla Model Y L compared
Tesla Model Y PremiumRivian R2Tesla Model Y L Rivian R1sWheelbase 113.9 in115.6 in119.7 in121.1 inLength 188.6 in185.9 in195.9 in200.8 inHeight 64.0 in66.9 in65.7 in77.3 in That extra wheelbase opens up a proper third row for passengers and more room for cargo (89 cubic feet vs. 76 for the standard wheelbase. This longer Y isn't much wider, so rather than a cramped seven-seat bench configuration, Tesla went with a 2+2+2, six-seat layout with second-row captain's chairs. The first two rows have heated and ventilated seats. The second row gets its own 8-inch touchscreen, while the front display grows to 16 inches, matching the updates that came to the Model Y Performance earlier this year.
The new third-row seats are a bit more economy class than the rest, lacking temperature-controlled surfaces or access to a screen. Still, I'd reckon they're a step up over the optional (and uncomfortable) jump seats that fold out of the standard model's cargo floor. At the very least, wayback riders now get their own dedicated speakers -- with 18 drivers overall now versus the standard model's 15 speakers -- and air vents.
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With more space inside, Tesla opted for captain's chairs for the second-row passengers.
TeslaUnder the hood, so to speak, the Model Y L Launch Series is a Premium AWD model with a little extra around the midsection. Its dual-motor setup outputs an estimated 514 hp and 435 pound-feet of torque (590 Nm) and is powered by the same roughly 80-kilowatt-hour battery as its smaller sister. Tesla and the US EPA estimate a range of 325 miles. That's only around 2 miles less than the standard Model Y Premium AWD. Oddly, the Y L claims a 4.4-second 0-60 mph sprint, which is about two-tenths quicker than the standard Model Y AWD despite the added mass. Weird.
The Y L continues to differentiate itself from the standard Y with the inclusion of vehicle-to-load bidirectional power (120V/20A AC when used with its charge port outlet adapter) and an electronic continuously variable suspension, which promises a more premium ride than the standard passive dampers. Owners will also be able to try out Tesla's Full Self-Driving (Supervised) driver aid tech for 12 months instead of the normal 1-month trial. (Though the $99 per month thereafter is the same.) It's unclear, however, whether these equipment and feature differences are specific and unique to the debut or will be carried through to future non-Launch Series examples.
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The more spacious third row is still economy class compared to the first two rows, but should be an improvement over the old jump seats.
Tesla Fighting on two fronts The $61,990 Launch Series Model Y L also arrives with special badging and graphics, inside and out, unique puddle lights, door-sill plates and suede dashboard trim. Even with these touches and the aforementioned extra equipment, the price is steep compared to the standard Model Y Premium AWD ($49,990). This initial batch will likely be followed by less expensive Standard and Premium configurations, but Tesla hasn't announced these post-Launch Series Model Y L models or how much they will eventually cost.
For $57,990, the new Rivian R2 Launch Package undercuts the Model Y L on price while offering similar range and features. Over the coming months, the R2 lineup will be joined by even more affordable trim levels, eventually reaching as low as $48,490 for the R2 Standard in 2027. That said, the Tesla Y L is also a larger three-row family hauler that doesn't necessarily directly compete with the R2 -- it slots in somewhere between the R2 and larger R1S ($83,990) in most dimensions and specs.
That makes cross-shopping the Tesla with other three-row EVs a bit more complicated, but it also means shoppers have a wider range of choices when choosing the right-size vehicle for their needs.
Antuan started out in the automotive industry the old-fashioned way, by turning wrenches in a driveway and picking up speeding tickets. He now has nearly 20 years of expertise and experience behind the wheel of hundreds of cars, including electric, hybrid, plug-in hybrid, hydrogen, and traditional combustion vehicles. For each car he tests, Antuan covers more than 200 miles behind the wheel and evaluates driving dynamics; acceleration and braking performance; range; and efficiency. Antuan's goal is to use his extensive car knowledge to educate CNET readers and help with their next car-related buying decision. Whether you're EV-curious, an EV-enthusiast or a combustion-car loyalist, Antuan will bring you the unbiased advice, reviews, best lists and news you need. You can reach Antuan at [email protected]
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Antuan Goodwin Senior Writer, Electrified Cars
Antuan started out in the automotive industry the old-fashioned way, by turning wrenches in a driveway and picking up speeding tickets. He now has nearly 20 years of expertise and experience behind the wheel of hundreds of cars, including electric, hybrid, plug-in hybrid, hydrogen, and traditional combustion vehicles. For each car he tests, Antuan covers more than 200 miles behind the wheel and evaluates driving dynamics; acceleration and braking performance; range; and efficiency. Antuan's goal is to use his extensive car knowledge to educate CNET readers and help with their next car-related buying decision. Whether you're EV-curious, an EV-enthusiast or a combustion-car loyalist, Antuan will bring you the unbiased advice, reviews, best lists and news you need. You can reach Antuan at [email protected]
Expertise Nearly two decades of testing, driving, reporting on, writing about, reviewing, and editing content about electric and ICE cars. Category focus is on electrified cars, EVs, HEVs, PHEVs, ICE cars, EV infrastructure, EV chargers, EV adapters, EV news, auton Credentials
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In the latest close session, Tesla (TSLA - Free Report) was down 4.02% at $402.90. This move lagged the S&P 500's daily loss of 0.45%. Meanwhile, the Dow experienced a drop of 0.25%, and the technology-dominated Nasdaq saw a decrease of 1.16%.
The electric car maker's stock has climbed by 2.65% in the past month, falling short of the Auto-Tires-Trucks sector's gain of 5.02% and outpacing the S&P 500's gain of 2.14%.
The upcoming earnings release of Tesla will be of great interest to investors. The company's earnings report is expected on July 22, 2026. The company's upcoming EPS is projected at $0.46, signifying a 15.00% increase compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $24.47 billion, indicating a 8.76% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $2.01 per share and revenue of $101.25 billion. These totals would mark changes of +21.08% and +6.77%, respectively, from last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Tesla. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 2.14% higher. Currently, Tesla is carrying a Zacks Rank of #3 (Hold).
Digging into valuation, Tesla currently has a Forward P/E ratio of 208.52. This denotes a premium relative to the industry average Forward P/E of 18.85.
We can additionally observe that TSLA currently boasts a PEG ratio of 9.91. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Automotive - Domestic stocks are, on average, holding a PEG ratio of 1 based on yesterday's closing prices.
The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. This industry, currently bearing a Zacks Industry Rank of 83, finds itself in the top 34% echelons of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
ToplineElon Musk’s net worth dropped more than $50 billion Tuesday as SpaceX shares tumbled, even as Wall Street banks raved about the rocket maker’s potential, including one that praised Musk’s firm’s potential impact on humanity as “bigger than any company’s we’ve ever seen.”
Shares of the rocket maker hovered over their debut price, even as Wall Street lauded the firm's potential.
Getty Images
Key FactsShares of SpaceX plunged by nearly 7% Tuesday to below their $150 debut price, while Tesla shares dropped by more than 4%.
Musk, who holds 4.8 billion SpaceX shares and another 350 million stock options, as well as roughly 700 million Tesla shares, had his net worth cut by $58.2 billion as a result, dropping it to $941.2 billion.
Several investment brokers opened coverage of SpaceX’s stock on Tuesday, the most bullish of which came from Raymond James analyst Brian Gesuale, who wrote his firm believed SpaceX was building the “foundational platform for the next generation of industrial capacity.”
“SpaceX’s ambitions, and potential impact on humanity, are bigger than any company’s we’ve ever seen,” JPMorgan analysts wrote.
surprising factJPMorgan analyst Rajat Gupta cast doubt on a possible merger between Tesla and SpaceX, writing that a tie-up between Musk’s firms is “strategically coherent on paper” and that their businesses would complement each other, but regulatory approval would prove difficult.
crucial quote“Just as railroads, electric grids, and the internet reshaped prior economic eras, we believe SpaceX is building the foundational platform for the next generation of industrial capacity,” Gesuale wrote.
big number$800. That’s Raymond James’ price target for SpaceX shares, a roughly 500% surge above its IPO price that would swell the company’s market valuation well above $10 trillion. Arete Research set a $401 price target, while Morgan Stanley set a $300 target and Goldman Sachs a $205 goal. On average, brokers expect SpaceX shares to be worth $236.
key backgroundMusk’s fortune has dropped by more than $500 billion since peaking at $1.45 trillion last month. His net worth plummeted as SpaceX shares lost momentum after a record-setting IPO, and Musk briefly lost his trillionaire status after Forbes cut $116 billion of his restricted Tesla stock from estimates of his wealth. He has since buoyed above and below the trillion-dollar threshold over the last week, even as more analysts offer bullish takes for SpaceX’s growth potential. Wedbush Securities analyst Dan Ives, a consistent bull for Tesla, called SpaceX “one of the most differentiated assets within the tech market” last week and argued Musk’s firm is “well-positioned to become a major hyperscaler” across connectivity, rocket launches and AI infrastructure.
further readingForbesMusk Is A Trillionaire Again: SpaceX And Tesla Boost Net Worth By $60 BillionBy Ty Roush
SpaceX Short-Term vs. Long-TermWoods told readers of his weekly newsletter and anyone who asked for advice on the SpaceX IPO, including his father, to make their allocations smaller than they would have liked.
"I think the valuation and the pre-market valuations, they scare me," Woods told Benzinga. "I think there are going to be a lot of people looking to cash out and that’s why I didn’t want it to go into the (S&P 500) index."
Woods said early inclusion in the S&P 500 may have forced buying and made the stock even more volatile at IPO, with people cashing out profits early.
The market expert is far from a SpaceX bear, telling Benzinga he believes the company is "here to stay."
"It’s going to be the biggest grower over time."
Woods said Starlink alone could be a trillion-dollar business.
"If you believe in Elon Musk, you don’t bet against him."
Woods is cautious on the stock keeping its valuation high in the short term after the IPO, telling Benzinga past successful large-cap IPOs have shown that investors get better opportunities to buy into the stock later on.
"I think any long-term investor, you want to buy the stock, put it away, don’t look at it."
Woods highlights Aug. 11 and quarterly earnings for SpaceX as a test, along with several lock-up periods.
"I don’t think this is something we have to rush into. I think there’ll be better opportunities."
Woods said SpaceX likely needs a couple of quarters of financial results as a public company before investors can get too optimistic and get away from the hype brought about by the company’s S1 filing.
"They’ll come back to Earth at some point. Yes, puns intended."
Woods said the $135 IPO pricing range could even get tested and give investors another chance to buy at that level.
"This stock will eventually double from where it is. But I don’t know the time frame as to when that will happen and I think there are better opportunities right now for a trader than to be in space."
SpaceX Index InclusionAhead of SpaceX’s IPO, Woods was vocal about long-standing indexes like the S&P 500 not changing their rules to speed up inclusion or change the requirements for a company to become a member.
"I think you know we have standards for a reason," Woods tells Benzinga. "I understand the market cap really calls into question that maybe there should be a special category. But, let them have this as a goal and guide."
Woods said that SpaceX doesn’t meet the profitability or float requirements that other companies had to meet to be included in the S&P 500.
"When you’re floating such a small amount of share, you’re not utilizing an inclusion into an index to help expand your float. And that to me was just wrong on that grounds."
The market expert recalled Tesla Inc (NASDAQ:TSLA) going down the same road, needing to hit profitability to be included in the S&P 500.
Woods said he doesn’t like the Nasdaq changing its rules, with SpaceX set to join the Nasdaq 100, tracked by the Invesco QQQ Trust (NASDAQ:QQQ) on July 7.
"The Nasdaq 100 is a very iconic place to be in," he added.
Image via Shutterstock
Market News and Data brought to you by Benzinga APIs
Tesla (TSLA) is facing renewed scrutiny after a Texas man was charged with manslaughter following a Model 3 crash into a home that killed a 76-year-old woman.Mi
HomeIndustriesAerospace/DefenseSome on Wall Street see an increasing likelihood that Elon Musk’s two biggest companies will combineJuly 7, 2026, 1:28 p.m. ET
Wall Street is increasingly entertaining the possibility of a merger between Elon Musk’s biggest companies, even if it wouldn’t necessarily be easy to pull off.
Tesla TSLA and SpaceX SPCX have been working together for years, although their relationship has deepened recently. In March, Musk announced that Tesla would work with SpaceX on a project aimed at developing a factory capable of making one terawatt per year of compute hardware.
Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.
One of our most popular services, Zacks Premium offers daily updates of the Zacks Rank and Zacks Industry Rank; full access to the Zacks #1 Rank List; Equity Research reports; and Premium stock screens like the Earnings ESP filter. All are useful tools to find what stocks to buy, what to sell, and what are today's hottest industries.
Also included in Zacks Premium is the Focus List. This is a long-term portfolio of top stocks that have all the traits to beat the market.
Breaking Down the Zacks Focus ListIf you could, wouldn't you jump at the chance for access to a curated list of stocks to kickstart your investing journey?
That's what the Zacks Focus List offers. It's a portfolio of 50 stocks that serve as a starting point for long-term investors to build their individual portfolios. The stocks included in the list are set to outperform the market over the next 12 months.
Additionally, each selection is accompanied by a full Zacks Analyst Report, something that makes the Focus List even more valuable. The report explains in detail why each stock was picked and why we believe it's good for the long-term.
The portfolio's past performance only solidifies why investors should consider it as a starting point. For 2020, the Focus List gained 13.85% on an annualized basis compared to the S&P 500's return of 9.38%. Cumulatively, the portfolio has returned 2,519.23% while the S&P returned 854.95%. Returns are for the period of February 1, 1996 to March 31, 2021.
Focus List MethodologyWhen stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.
Earnings estimates, or expectations of growth and profitability, come from brokerage analysts who track publicly traded companies; these analysts work together with company management to analyze every aspect that may affect future earnings, like interest rates, the economy, and sector and industry optimism.
What a company will earn down the road also needs to be taken into consideration, and this is why earnings estimate revisions are so important.
The stocks that receive positive changes to earnings estimates are more likely to receive even more upward changes in the future. Take this example: if an analyst raised their estimates last month, they'll probably do so again this month, and other analysts will follow.
Utilizing the power of earnings estimate revisions is when the Zacks Rank joins the party. A unique, proprietary stock-rating model, the Zacks Rank uses changes to quarterly earnings expectations to help investors create a winning portfolio.
The Zacks Rank consists of four main pillars: Agreement, Magnitude, Upside, and Surprise. Each one is given a raw score, which is recalculated every night and compiled into the Rank. Then, stocks are classified into five groups, ranging from "Strong Buy" to "Strong Sell," using this data.
The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.
Because stock prices react to revisions, buying stocks with rising earnings estimates can be very profitable. Focus List stocks offer investors a great opportunity to get into companies whose future earnings estimates will be raised, potentially leading to price momentum.
Focus List Spotlight: Tesla (TSLA - Free Report) Over the years, electric vehicle (EV) maker Tesla has evolved into a dynamic technology innovator. It has transformed the EV space like Amazon changed the retail landscape and Netflix revolutionized entertainment. Tesla, which managed to garner a gold-standard reputation over the years, is now a far bigger entity than it was at the time of its IPO in 2010. However, with growing competition, Tesla's market share in battery-powered electric car sales in the United States has eroded to around 50%, from roughly 80% in 2020.
On August 29, 2024, TSLA was added to the Focus List at $205.75 per share. Shares have increased 104.02% to $419.77 since then, and the company is a #3 (Hold) on the Zacks Rank.
For fiscal 2026, five analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.01 to $2.01. TSLA boasts an average earnings surprise of 5.5%.
Earnings for TSLA are forecasted to see growth of 21.1% for the current fiscal year as well.
Reveal Winning StocksUnlock all of our powerful research, tools and analysis, including the Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. You'll quickly identify which stocks to buy, hold and sell, and target today's hottest industries, to help improve the performance of your portfolio. Gain full access now >>
Tesla (NASDAQ:TSLA | TSLA Price Prediction) keeps proving that investors can become fixated on the wrong metric. Every quarterly delivery report sparks debate over electric vehicle demand, price cuts, and market share. Its recent expansion of the Cybercab robotaxi service into Miami only reinforced that narrative, with Morgan Stanley forecasting Tesla could operate a fleet of roughly 30,000 robotaxis by 2030.
Those developments matter, but they may not be the biggest reason to own the stock. While headlines remain centered on cars, Tesla has been quietly building another business that could benefit from one of the world’s largest investment themes: modernizing the electric grid.
Tesla’s EVs Still Grab the Spotlight Tesla recently delivered more vehicles than many analysts expected, easing concerns that slowing EV demand would pressure growth throughout 2026. The company’s rollout of its Cybercab robotaxi service into Miami also demonstrated that autonomous transportation remains a central part of Elon Musk’s long-term vision.
Yet, autonomous driving still faces regulatory hurdles, technology risks, and competitive pressure from rivals including Alphabet‘s (NASDAQ:GOOG) Waymo and other emerging players.
Investors, though, should look beyond the vehicles themselves. Whether Tesla sells EVs to individual drivers or deploys them in a ridesharing fleet, both businesses ultimately compete in mature transportation markets. The opportunity investors may be underestimating sits elsewhere.
tsla
Energy Storage is Becoming a Second Growth Engine Tesla’s first-quarter shareholder update showed energy storage deployments declined 15% year over year. At first glance, that looked like a warning sign, but management explained the decline reflected the timing of large utility-scale projects rather than weakening demand. Megapack installations are tied to customer construction schedules, permitting timelines, and grid connections. Unlike vehicle sales, these projects do not arrive evenly throughout the year.
That explanation already appears to be playing out. Tesla just announced a Megapack agreement with Esyasoft, an Indian digital platform for utility grid management and electrification. The deal is worth as much as $3 billion to deliver more than 15 gigawatt-hours (GWh) of battery energy storage systems across the U.K., Western Europe, the Gulf Cooperation Council, and India.
According to Tesla Energy & Charging Vice President Mike Snyder, Tesla’s vertically integrated approach allows the company to streamline projects from design through operation while accelerating deployment of modern grid infrastructure.
The deal also fits a much larger trend. According to Tesla observer Sawyer Merritt on X, more than $9 billion worth of new Tesla Megapack projects totaling over 43 GWh have been announced during the past six weeks. The Basenor blog also highlighted a growing list of recent Megapack wins spanning utilities and commercial customers across multiple continents.
Just this year, Tesla energy has:
Secured the first phase of a program with NatPower to build 25 GWh of storage across Italy and Britain, while targeting over 100 GWh over 20 years. Potential revenue could exceed $15 billion. xAI purchased an $269 million of Megapack product, for a total of over $1 billion worth since 2024. Signed an $80 million order with Belgium’s Energy Solutions Group for a 76 MW / 304 MWh system, with an eye toward a 2027 grid connection. That isn’t the pattern of a business losing momentum. It’s the pattern of one whose revenue arrives in waves.
The Grid May Be Tesla’s Largest Addressable Market Battery storage solves one of renewable energy’s biggest problems: balancing electricity supply when the sun isn’t shining or the wind isn’t blowing. Utilities worldwide are investing billions to strengthen aging grids while supporting AI data centers, electrification, and rising electricity demand. Tesla’s Megapack business sits squarely at that intersection.
Some investors continue to speculate that Tesla could eventually merge with SpaceX (NASDAQ:SPCX), creating another catalyst for the shares. Unless and until that happens, however, Tesla already has a powerful growth engine operating in plain sight.
Key Takeaway In short, Tesla’s EV business and robotaxi ambitions deserve attention, but they may no longer define the company’s largest long-term opportunity. Delivery numbers will continue moving the stock quarter to quarter, while Cybercab could reshape transportation over time. Yet the energy business is quietly building a multibillion-dollar backlog supported by global grid modernization.
Smart investors should keep watching vehicle deliveries, but they should pay even closer attention to Megapack orders. The numbers increasingly suggest Tesla is becoming as much an energy infrastructure company as it is an automaker.
The headline number cuts through the noise around Tesla (NASDAQ:TSLA | TSLA Price Prediction) faster than any product roadmap can. It is the price tag investors have chosen to hang on the entire enterprise, and Q1 finally gave the bulls a fresh reason to defend it.
The Number Tesla’s market capitalization sits at roughly $1.48 trillion as of July 2, 2026, built on 3.76 billion shares outstanding and a trailing P/E of 383. That valuation is what makes the $500 billion question so sharp: how much of this trillion-dollar-plus market cap is priced for a car company, and how much is being paid up front for AI, robotics, and autonomy that has yet to show up on the income statement?
What It Means On the surface, Tesla’s multiple looks stretched against the fundamentals. Full-year 2025 revenue came in at $94.83 billion, down 2.93% year over year, with net income of $3.794 billion after a 46.79% annual decline. Return on equity is 4.89%, gross margin is 18.03%, and the PEG ratio of 6.23 sits well above the 1.0 line typically used as a fair-value marker.
I think tesla’s Q1 2026 quarter changed the arithmetic of the argument. The company’s revenue rebounded to $22.39 billion, up 15.78% year over year. EPS came in at $0.41, topping consensus expectations by 14.14%. Automotive gross margin expanded to 21.1% from 16.2%. Operating income jumped 135.84% to $941 million, and free cash flow rose 117.47% to $1.444 billion. Cash on the balance sheet climbed to $44.743 billion, up 173.62% from a year earlier.
Market Reaction The stock has not confirmed the fundamental turn. Shares closed at $393.45 on July 2, 2026, down 7.49% on the day, down 12.51% year to date, and down 7.15% over the past month. Over one year, however, shares are still up 24.65%, and over ten years, up 2,625.98%.
Bull Case The bull argument for Tesla now rests on three data points that showed up together for the first time in a year. Margin expansion is real, with 490 basis points of automotive gross margin recovery in a single quarter. Operating leverage is returning, with 136% operating income growth on 15.78% revenue growth is the definition of an inflection. And the company’s software lineup is starting to matter, as Tesla’s Services & Other revenue reached $3.745 billion, up 42% year over year, powered by 1.28 million active FSD subscriptions, up 51% year over year.
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The forward pipeline adds ballast. Management placed Cybercab, Tesla Semi, and Megapack 3 on schedule for volume production in 2026, and confirmed Optimus production lines are being installed at Fremont and Gigafactory Texas. On Tesla’s Q1 call, Elon Musk said unsupervised FSD revenue “will be material probably in a significant way next year” and described Optimus as “probably the biggest product ever”. CFO Vaibhav Taneja set 2026 capital expenditure at over $25 billion.
Notably, analyst consensus target price sits at $421.16, with 23 Buy, 18 Hold, and 6 Sell ratings.
Bottom Line For long-term holders, Q1 2026 is the first quarter in the last four where growth, margin, and cash flow moved in the same direction. That does not resolve the valuation debate at a forward P/E of 217 against a 4.48% ten-year Treasury yield, and prediction markets remain skeptical on the near-term catalysts, pricing a California robotaxi launch at 22% and Optimus release by year-end at 10%.
The bull case is that the trillion-dollar tag stops being a question and starts being an base once software, energy, and robotics revenue compound on top of an auto business whose margins just found their footing. The next reading arrives with the Q2 report, and after Q1, the bar has shifted from whether Tesla can grow to whether it can keep doing it.
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Tesla (TSLA 2.89%) is a leader in the electric vehicle (EV) market, and a key metric many investors often look for is how many deliveries it made during the past quarter. Strong delivery numbers can be a great sign of rising demand and that the business is doing well.
Recently, however, Tesla reported its delivery numbers, which blew past expectations, and yet, that didn't give the stock a boost. It even fell on the news. What's going on with the stock, and could its weakness this year make for a great buying opportunity, or could it fall even lower?
Image source: Getty Images.
Why strong delivery numbers may not be enough to give the stock a boost Last week, Tesla reported its delivery numbers for the second quarter, which came in at 480,126. That's significantly higher than the 406,600 that analysts were expecting. It's a massive beat on the key metric, but the stock still fell by nearly 8% the day the numbers came out. A year ago, its deliveries for the quarter were 384,122, which means these latest figures indicate a 25% increase.
While the news wasn't bad, it may have reminded investors that Tesla's core business is EVs and will be for the foreseeable future. Although that may seem obvious, the stock doesn't trade like an EV stock but rather an artificial intelligence stock, with CEO Elon Musk's focus largely on robots and visions that go far beyond EVs. Plus, the company has been offering lower-priced vehicles to be more competitive. This means that while it may generate more revenue from greater deliveries, that may not necessarily translate into huge profit growth, given its tighter margins.
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Is Tesla's stock a good buy on weakness right now? Tesla's stock is down close to 20% from its 52-week high as investors have become more bearish on the company in light of its worsening results. Last year, the company's profit of $3.8 billion was nearly half of the $7.1 billion it reported a year earlier, and down drastically from a $15 billion profit in 2023.
Shrinking profits have made the stock more expensive relative to earnings, with the stock trading at a price-to-earnings ratio of more than 370. It's a massive premium, underscoring just how much optimism is priced in and how high expectations are for the future. Tesla's EV business may be driving its revenue and profit, but not its sky-high valuation. At such a high premium, investors are taking on significant risk with Tesla's stock, as there is plenty of room for it to fall much lower.
Tesla (TSLA - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this electric car maker have returned +2.7% over the past month versus the Zacks S&P 500 composite's +2.1% change. The Zacks Automotive - Domestic industry, to which Tesla belongs, has gained 6.6% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Tesla is expected to post earnings of $0.46 per share, indicating a change of +15% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.4% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $2.01 points to a change of +21.1% from the prior year. Over the last 30 days, this estimate has changed +2.1%.
For the next fiscal year, the consensus earnings estimate of $2.58 indicates a change of +28.4% from what Tesla is expected to report a year ago. Over the past month, the estimate has changed +0.9%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Tesla.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Tesla, the consensus sales estimate for the current quarter of $24.47 billion indicates a year-over-year change of +8.8%. For the current and next fiscal years, $101.25 billion and $113.49 billion estimates indicate +6.8% and +12.1% changes, respectively.
Last Reported Results and Surprise HistoryTesla reported revenues of $22.39 billion in the last reported quarter, representing a year-over-year change of +15.8%. EPS of $0.41 for the same period compares with $0.27 a year ago.
Compared to the Zacks Consensus Estimate of $21.92 billion, the reported revenues represent a surprise of +2.12%. The EPS surprise was +13.89%.
Over the last four quarters, Tesla surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Tesla is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Tesla. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Tesla (TSLA +6.70%) is scheduled to report second-quarter earnings after market close on July 22. As usual, Tesla's earnings arrive against a backdrop of already reported vehicle deliveries.
Since the company has moved past its usual quarterly delivery update, the market now has time to digest some cursory business trends before the full financial picture emerges. This invites a closer look at what really matters for Tesla's operating results and whether the stock's recent behavior offers clues for what might happen next.
Image source: The Motley Fool.
What is Wall Street expecting for Tesla's upcoming earnings report? Current consensus estimates forecast Tesla's revenue at around $25.4 billion and EPS at $0.48 for the second quarter. Beyond revenue and earnings, investors will surely scrutinize Tesla's automotive gross margins for signs of pricing pressure or cost discipline, the pace of expansion in the energy storage business, and any incremental discussion of free cash flow and capital expenditures.
Commentary on progress around Full Self-Driving (FSD) or future product timelines for the robotaxi and Optimus will likely surface as well. However, the immediate reaction to Tesla stock post-earnings tends to hinge on whether the company beats or misses the revenue and profit expectations already set.
Did Tesla beat Q2 delivery expectations? On July 2, Tesla published that it delivered roughly 480,000 vehicles during the second quarter, comfortably ahead of the 406,000 units analysts had modeled and up about 25% from the same period last year.
The beat ends a stretch of softer-than-expected volume comparisons and may finally point to improving demand. Because vehicle deliveries translate directly into automotive revenue, the strong performance increases the likelihood that Tesla's top line will exceed expectations. At the same time, smart investors understand that volume surges can leave open questions about average selling prices and any product mix shifts that could influence profitability.
Is Tesla stock a buy before earnings? When Tesla reported deliveries on July 2, shares actually fell sharply by as much as 7%, marking one of the stock's weakest days in nearly a year. Even though Tesla's results were impressive, the decline occurred because much of the positive momentum had already been reflected in the price during the preceding weeks.
Markets have a tendency to price in optimistic scenarios before an event actually occurs. Traders took profits once the good news was actually confirmed.
I think a comparable dynamic could easily play out after the full earnings release. A clean beat on revenue and EPS might produce a muted or even negative reaction if management's guidance falls short of delivering fresh, measurable catalysts. This is why timing the market around any single quarterly report is a fool's errand.
Tesla appeals to investors who see value in the eventual scaling of robotaxis and humanoid robots. However, neither of these initiatives contributes meaningfully to Tesla's business today.
TSLA PE Ratio data by YCharts
For most investors, Tesla functions primarily as an expensive momentum stock whose current valuation rests more on hype than on tangible near-term financial payoffs from the company's moonshot bets. The company's upcoming earnings report is unlikely to resolve these broader tensions one way or the other.
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Tesla has released its new summer collection of accessories. Tesla Tesla is selling new summer-y gear to existing owners.
The EV maker recently updated its online shop with a collection of in-car summer accessories and lifestyle gear. The add-ons include a $595 dual-zone fridge that fits into the Model Y's sub-trunk, a rear-attaching tent for the Cybertruck, and fitted air mattresses for the Model 3 and Cybertruck.
Several products — including the fridge, air mattresses, and a foldable chair — are out of stock, according to the website.
Tesla has released new items on its online shop in the U.S.
• Model Y Dual Zone Fridge: $595. Operates from 0°F to +68°F
• Model Y Canopy: $165
• Cybertruck Air Mattress: $295
• On the Road Chair: $125
• Tesla Electric Summer Party Tee: $35
• Tesla Electric Summer Tee: $35… pic.twitter.com/S7MRkosAxD
— Sawyer Merritt (@SawyerMerritt) July 3, 2026 On one level, the collection is a classic summer-commerce play: Americans are roadtripping and heading to the beach as much of the country swelters through extreme heat.
But the accessories also say something bigger about Tesla's approach and manufacturing strategy. The automaker has increasingly leaned on its existing vehicles — especially the Model Y. Like FSD subscriptions, custom-fit accessories let Tesla squeeze more revenue and brand loyalty from its existing customers after the car's initial purchase.
The accessories also play into Tesla's manufacturing advantage. The company builds a small number of vehicle models and trims compared with legacy automakers, making it easier to design accessories for standardized interiors, trunks, power outlets, and cargo areas.
The timing of the summer collection's release is notable. While Tesla beat sales estimates in its recent quarter, the automaker is facing fresh competition from punchy EV challengers that are leaning into utility, customization, and lifestyle. Rivian has begun delivering the R2, its Model Y competitor, to public customers, while Slate says its highly customizable electric trucks will be in customers' hands by the end of the year.
Tesla also recently added the Model Y L, a $61,990 six-seat version of its best-selling SUV, to its US lineup, following the discontinuation of the three-row Model X earlier this year.
Tesla didn't immediately respond to a request for comment from Business Insider.
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Ben Shimkus You're currently following this author! Want to unfollow? Unsubscribe via the link in your email.
Ben Shimkus is a reporter for the Business News desk. He writes about cars, transportation, retail, and jobs. Ben's reporting has appeared in Rolling Stone, The Verge, Automotive News, USA Today, AutoBody News, LGBTQ Nation, TopSpeed, and Out Magazine. He's also held staff writing positions at The U.S. Sun and the Daily Mail. He graduated from NYU with a Master's in journalism in 2024. Email Ben at [email protected] or message him privately on Signal at bshimkus.41.
Tesla (TSLA +6.70%) reported significant growth in EV deliveries in its most recently completed quarter.
*Stock prices used were the afternoon prices of July 3, 2026. The video was published on July 5, 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 +6.70%) Robotaxis began picking up passengers in Miami on Friday -- the company's first market outside Texas and California. The service begins modestly, in a geofenced slice of western Miami-Dade County reportedly running from West Miami toward Doral, with downtown and Miami Beach left out for now.
The day before, Tesla reported 480,126 second-quarter deliveries, up about 25% year over year -- and the stock fell 7.5% anyway. But the stock is regaining some ground on Monday as investors hope the company's Robotaxi business may begin to gain steam.
Is the Robotaxi business scaling fast enough to be that something?
Cybercab. Image source: Tesla.
The map is filling in The Robotaxi service is barely a year old. Tesla launched it in Austin last summer with safety monitors aboard, began removing them, and has been layering on markets since. Miami is a sensible next test bed, too: flat roads, year-round driving weather, and heavy visitor traffic that leans on ride-hailing.
Notably, Miami extends the Robotaxi footprint beyond Tesla's home states for the first time. According to the company's first-quarter update, Tesla lists Austin, Dallas, and Houston as ramping unsupervised, operates with safety drivers in the San Francisco Bay Area, and lists Miami, Orlando, Tampa, Phoenix, and Las Vegas as markets with preparations underway. Friday converted the first of those five from planned to live.
But Tesla still hasn't yet reached meaningful scale -- at least not enough to significantly enhance the bull case for the stock. The Austin fleet is still reportedly measured by the dozens of vehicles, with the unsupervised portion of this fleet smaller still. And early riders across markets have described long waits and occasional software misfires. Additionally, availability remains limited to specific service areas in Tesla's dedicated Robotaxi app -- another sign this remains a controlled rollout rather than a mass-market service.
What a city launch can't fix The market's frustration that has left shares in the red for the year arguably isn't about Tesla's expanding Robotaxi service. The company's first-quarter operating margin was just 4.2%, on revenue that grew 16%.
Additionally, the stock's valuation remains difficult to justify. With $1.10 in earnings per share over the past 12 months, the stock trades at more than 380 times earnings -- a price that arguably makes sense only if autonomy becomes a large, profitable business on a reasonable timeline. Growth in the teens isn't what investors are paying for. Autonomy is.
Ultimately, a launch in Miami shows progress. But investors still need more concrete evidence to know Robotaxi can become material to results soon. Tesla hasn't disclosed Robotaxi revenue, ride volumes, utilization, or per-mile costs. Investors, therefore, are still mostly left in the dark.
We'll likely know more on July 22, when Tesla is scheduled to report earnings. If Tesla opts to provide more data on the Robotaxi program and more details about its plans and its potential economics, investors will have more data points to gauge just how much this Robotaxi business may be worth to the overall business.
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So, can Miami rescue the stock?
Based on the stock's sharp rebound on Monday, the initial phases of a rescue may already be underway. But shares are still down almost 7% year to date. To fully recover, Tesla will likely need more upbeat news on its Robotaxi program -- news that starts making it sound like the program will soon start contributing meaningfully to Tesla's financial results.
The rollout cadence is encouraging -- five markets live and four more queued -- and Tesla is executing the expansion it laid out for investors. But with a price-to-earnings ratio of about 380, the growth stock needs autonomy to start showing up in the financial statements, not just on maps.
Despite a 9% gain in the benchmark S&P 500 so far in 2026, Tesla (TSLA +6.70%) stock has moved in the opposite direction, posting a 12% loss (as of market close on Thursday, July 2). The company is coming off two straight years of declining electric vehicle (EV) sales, so investors are understandably cautious.
But on July 2, Tesla reported its EV deliveries for the second quarter of 2026 (ended June 30), blowing away Wall Street's expectations. They also grew for the second consecutive quarter, which suggests this critical part of Tesla's business might finally be recovering.
That said, Tesla stock is trading at a sky-high valuation, which makes it a very tough investment despite recent improvements in its EV sales. Here's why it probably isn't a good buy right now.
Image source: Tesla.
Tesla's EV sales appear to be recovering Tesla delivered 1.79 million EVs in 2024, which was a 1% decline from the previous year. Sales fell at an even faster pace of 9% in 2025, with deliveries coming in at just 1.63 million. EV sales still account for over 70% of Tesla's revenue, so the declines put a real dent in the company's earnings, which plummeted by 47% last year alone.
Fortunately, the electric vehicle business seems to be recovering. Tesla delivered 358,023 cars during the first quarter of 2026, which was up 6% from the year-ago period. And on July 2, the company announced 480,126 deliveries for the second quarter, which was up 25%. It also topped Wall Street's average forecast of around 406,000 deliveries by a very wide margin.
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Geopolitical tensions in the Middle East have sparked a surge in gas prices since February, likely benefiting Tesla's sales during the second quarter as more consumers made the switch to an EV. However, gas prices have started to decline thanks to an ongoing ceasefire between the U.S. and Iran, so it's unclear whether this tailwind will extend into the rest of 2026.
The increasingly competitive landscape has been Tesla's biggest challenge over the last couple of years, as a raft of low-cost EV brands has flooded important markets like China and Europe. The company has responded by launching cheaper versions of its flagship Model 3 and Model Y EVs, but it still can't compete with China-based BYD, which sells its entry-level Dolphin Surf for under $30,000 in Europe.
Tesla will pivot away from the passenger EV business over the long term by focusing on its Cybercab autonomous robotaxi and its Optimus humanoid robot, but these products are still at least a year away from mass commercialization. In the meantime, shareholders might have to endure volatile financial results from the EV business.
Tesla is a tough investment because of its valuation Based on Tesla's trailing 12-month earnings of $1.09 per share, its stock trades at a price-to-earnings (P/E) ratio of 359. That makes it over 10 times as expensive as the Nasdaq-100 index, which has a P/E ratio of 35.2, so Tesla looks extremely overvalued compared to a basket of its big-tech peers.
Data by YCharts.
Tesla will report its official financial results for the second quarter on Wednesday, July 22, and given the sharp uptick in EV sales, its revenue and earnings are likely to grow nicely. Therefore, its stock might be slightly cheaper than it currently appears at face value once those latest earnings are factored in, but it will almost certainly still be more expensive than the Nasdaq-100 by several orders of magnitude.
Tesla's sky-high valuation is probably the main reason why its stock is down 12% this year, despite the gains in the broader market. Unfortunately, the door is open to an even steeper correction if the momentum in the company's EV business slows over the next couple of quarters -- and that is a real risk with gas prices coming down.
In my opinion, the only way investors could yield a positive return in Tesla stock from its current price is by adopting a very long-term outlook of at least five years. That will give the company time to bring new products like Optimus and the Cybercab to market, which could fuel its next phase of growth.
“Today, much of the robotics industry is still built around a single transaction: a machine is built, sold, and delivered,” Wang told Benzinga. “We believe the larger opportunity begins after delivery.”
Beyond Hardware SalesWang believes the robotics industry is approaching a business-model shift similar to what software experienced with subscriptions and cloud computing.
Instead of treating robots as one-time hardware purchases, he envisions them as long-lived assets that continue creating economic value throughout their operating lives. He calls the concept the “Robot Second Life Cycle,” where value extends beyond the initial sale through greater utilization, longer operating lives and the operational data robots generate while performing real-world tasks.
That distinction could eventually reshape how investors evaluate robotics companies. Rather than focusing solely on unit sales, the market may increasingly reward businesses that can generate recurring revenue from robots long after they’re deployed.
The Rise of Robot RentalsThat thinking also underpins Wang’s vision for Robotics-as-a-Service.
“A lot of businesses don’t necessarily want to own robots outright,” he said. “What they really want is access to robotic capabilities when those capabilities can create clear, measurable value.”
Instead of committing significant upfront capital, companies could rent robots for warehouse operations, inspections, security, deliveries or other specialized tasks, while robot owners generate income from equipment that might otherwise sit idle.
Wang sees parallels with another technology revolution.
“If cloud computing turned expensive servers into something you can access on demand, we think Robotics-as-a-Service can do something similar for robotic capabilities,” he said.
The Next Robotics TradeFor now, investors remain focused on which company will build the most capable humanoid robot. Tesla, Figure AI and other developers continue competing to improve mobility, intelligence and manufacturing scale.
But Wang argues the industry’s economics could eventually matter just as much as its engineering.
If robots become recurring revenue-generating assets rather than one-time hardware sales, the companies creating the most long-term value may not simply be those shipping the most machines—they could be the ones keeping those machines working, earning and generating data for years after deployment.
For investors, that suggests the next chapter of the robotics story may begin not when a robot is sold, but when it starts working.
Image courtesy company PR
Market News and Data brought to you by Benzinga APIs
Americké akciové indexy vykázaly v úvodní seanci po prodlouženém víkendu kladnou bilanci v čele s technologickým Nasdaqem (+1,12 %). Širší index S&P500 přidal 0,72 % a Dow Jones 0,29 %. Mírný zisk registrovaly také dluhopisy vyjma nejdelších maturit. Výnos 10letého vládního bondu se posunul na 4,47 % z pátečních 4,48 %. V červeném uzavřely drahé kovy. Zlato odepsalo 0,3 % na 4162 USD/oz, stříbro končilo slabší o 0,64 % na 62 USD/oz. V energetickém sektoru se dařilo zemnímu plynu, který zpevnil téměř o 1,7 % na 3,25 USD/mmbtu. Ropa končila beze změny na 68,7 USD/barel.
Závěrečné hodnoty:
Index Dow Jones 0,29 % na 53055,91 b.
Index Nasdaq Composite 1,12 % na 26121,16 b.
Index S&P 500 +0,72 % na 7537,43 b.
Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Sektor komunikací +1,6 % Zdravotní péče -1,2 % Informační technologie +1,3 % Utility -1,1 % Nezbytná spotřeba +1 % Reality -0,9 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Arista Networks (ANET) +8,3 % O'Reilly Automotive (ORLY) -6,7 % Western Digital (WDC) +7,1 % AutoZone (AZO) -6,4 % Tesla (TSLA) +6,7 % Alexandria Real Estate Equities (ARE) -5,2 % Advanced Micro Devices (AMD) +6,6 % Constellation Brands (STZ) -4,9 % NetApp (NTAP) +6,1 % Tractor Supply (TSCO) -4,8 % Zdroj: Reuters
Tesla (TSLA) shares climbed about 1.5% in early Monday trading after the electric vehicle maker broadened its autonomous ride-hailing footprint with a Robotaxi
An old-economy sector fund is quietly beating the market darlings this year, and it holds zero shares of the electric-vehicle giant everyone loves to argue about. The iShares U.S. Aerospace & Defense ETF (NYSEARCA:ITA) has climbed 13.74% year to date and 32.48% over the trailing year, all while owning none of the Magnificent Seven, including Tesla (NASDAQ:TSLA | TSLA Price Prediction). Over the same year-to-date stretch, Tesla shares have fallen 12.51%.
What ITA Actually Owns ITA is BlackRock’s iShares fund tracking large- and small-cap U.S. companies in the aerospace and defense industry. As of March 31, 2026, the fund managed $13.49 billion in net assets spread across 47 holdings. The portfolio is heavily concentrated at the top: the ten largest positions represent roughly 64% of assets.
The top three names alone drive the fund. GE Aerospace sits at 19.03%, RTX at 16.55%, and Boeing at 8.91%. Behind them: General Dynamics at 4.77%, L3Harris at 4.66%, Lockheed Martin at 4.58%, Northrop Grumman at 4.58%, TransDigm at 4.53%, and Howmet at 4.50%.
Why the Fund Is Running Defense primes have benefited from a step-change in federal budget authority. The FY 2027 President’s Budget request for the Department of the Air Force alone reaches $391.1 billion, and procurement lines for major weapons systems are expanding, with the F-35 program alone jumping to a $21.4 billion request for FY 2027. Commercial aerospace has added its own tailwind through Boeing’s production ramp and record engine-services demand at GE Aerospace and RTX.
Growth-oriented names inside the fund have amplified the move. Axon Enterprise sits at 2.83%, Rocket Lab at 2.55%, and Kratos Defense at 1.10%. Goldman Sachs flagged economic security as a prominent 2026 theme, and this fund is a direct expression of it.
The Tesla Question Tesla is not in the fund’s 47 holdings as of the most recent NPORT filing. The reason is methodology, not opinion. ITA tracks a sector-focused index limited to aerospace and defense classifications. Tesla, at a $1.48 trillion market cap, is categorized under consumer discretionary and automotive. Its rockets are at SpaceX, a separate private company. The index simply has no lane 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.
That exclusion has helped this year. Tesla trades at a price-to-earnings ratio of 421, and the stock is down 12.51% year to date despite a 14.14% Q1 earnings beat on $22.39 billion in revenue. Broad tech-adjacent volatility that has dragged Magnificent Seven names lower has bypassed ITA entirely.
What the Absence Means for Risk Funds that hold Tesla, including most total-market and consumer discretionary ETFs, have carried the drag from its year-to-date decline. ITA has skipped that hit but taken on a different concentration risk: three companies (GE Aerospace, RTX, Boeing) account for roughly 44.5% of the portfolio. A production stumble at Boeing or a Pentagon continuing-resolution fight could reverse the trend quickly.
The fund also skews cyclical. Over five years, ITA has returned 130.85%, and over ten years, 330.57%. Those numbers include long stretches when defense budgets were less generous and aerospace was grounded during the pandemic.
The Takeaway For retirement-focused investors weighing a sector allocation, ITA offers direct exposure to a policy-driven earnings cycle without wagering on high-multiple consumer tech. That is the trade-off: no Tesla upside if the stock rebounds, but no Tesla drawdown either. Past performance doesn’t guarantee future results, and this article is not investment advice. Anyone considering a position should weigh the fund’s concentration in a handful of prime contractors against the defense-spending backdrop that has powered its 6.14% trailing-month and double-digit year-to-date gains.
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 (TSLA +6.04%) has expanded its robotaxi rollout, and a company executive has teased that another major announcement is coming tomorrow. That news helped shares pop today. As of 2:27 p.m. ET, Tesla stock was higher by 6% to start the week.
The company posted on its social media account that it has officially launched its driverless robotaxi service in Miami, Florida. That is giving investors a clue about what a Tesla vice president was talking about last week when he teased that a big announcement is coming tomorrow.
Image source: The Motley Fool.
Austin gigafactory news Tesla said it has started its robotaxi service in Miami on July 3. That makes Florida the third state beyond Texas and California, but the rollout has been measured. In the post announcing the Miami launch, the company's social media account included a map showing a relatively small geofenced area where the service will be available.
More importantly for investors, though, is what it could mean for the announcement that is coming tomorrow. Tesla vice president of vehicle engineering, Lars Moravy, appeared on a podcast last week and stated that on July 7, "there will be some cool news about things happening around Giga Texas as part of the scaling effort."
Investors may be jumping into the stock today, believing that the Texas plant will be scaling its manufacturing capacity to prepare for a massive rollout of Tesla's Cybercab for its future unsupervised robotaxi fleet.
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An artificial intelligence (AI) powered robotaxi fleet, along with future humanoid robots, is mainly what has Tesla's valuation so high. Another step toward building out the driverless taxi fleet has investors getting excited.
Howard Smith has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
Americké akciové indexy se po prodlouženém víkendu, kdy ještě doznívají sváteční konfety, pohybují v kladném teritoriu v čele s technologickým Nasdaqem, který přidává bezmála 1,3 %, širší index S&P500 pak posiluje o 0,7 %. Kosmetický zisk 0,05 % si připisuje též tradiční index Dow Jones.
K růstu se po korekci v minulém týdnu vrátily polovodiče. Referenční Philadelphia SE Semiconductor index zpevňuje téměř o 4 % a sektor informačních technologií jednoznačně dominuje dnešnímu odvětvovému růstu v rámci S&P500 se ziskem 2 %. Jim sekundují komunikační služby (+0,9 %). Naopak sektor zbytných statků, zdravotnictví a utilit vykazuje více než 1% ztrátu.
Po sérii nových historických maxim z prvního pololetí přijde již brzy další test robustnosti trhu v podobě výsledkové sezony. Zejména volatilní polovodičový sektor v poslední době ukazuje, že prostor pro zklamání je omezený. Reportovací období pomyslně odstartují příští úterý přední americké banky.
Smíšeným vývojem dnes prochází dluhopisy. Zatímco kratší maturity lehce zpevňují, delší splatnosti naopak mírně ztrácí. Výnos 10letého vládního bondu se drží těsně nad hladinou 4,48 %. Drahé kovy vykazují ztráty. Zlato odepisuje 0,6 % na 4152 USD/oz, stříbro oslabuje o 1 % na 61,8 USD/oz.
V energetickém sektoru se nedaří ropě, která se obchoduje slabší o 0,6 % na 68,3 USD/barel, zemní plyn naopak přidává 0,9 % na 3,23 USD/mmbtu.
Na korporátní úrovni S&P500 konstituentů si nejlepší výsledek připisují akcie výrobce procesorů a AI akcelerátorů, spol. AMD (AMD +7,9 %) po zvýšeném cíli od Goldman Sachs na 640 z předchozích 450 USD při trvajícím poptávkovém momentu v oblasti AI. Nejhorší výsledek pak registruje prodejce náhradních autodílů, spol. O’Reilly (ORLY -7,2 %) po zprávách o akvizičním zájmu převzít konkurenta NAPA Auto Parts, divize spol. Genuine Parts (GPC), při hotovostní nabídce za více než 10 mld. USD. Nedaří se ani dalšímu z prodejců auto komponent, spol. Autozone (AZO -6,1 %).
Z dalších zajímavých korporátních zpráv pak doplňme oznámení Microsoftu (MSFT -1,2 %) o propuštění 4800 zaměstnanců (2,1 % pracovníků). V polovodičovém segmentu potěšil investory Broadcom (AVGO +4,2 %) po prodloužení obchodní spolupráce s Applem (AAPL) do roku 2031.
Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Informační technologie +1,9 % Zbytná spotřeba -1,5 % Sektor komunikací +1 % Zdravotní péče -1,3 % Nezbytná spotřeba +0,8 % Utility -1,2 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Advanced Micro Devices (AMD) +7,9 % O'Reilly Automotive (ORLY) -7,2 % Arista Networks (ANET) +7,7 % AutoZone (AZO) -6,1 % VERTIV HLD A O (VRT) +6,7 % Constellation Brands (STZ) -5,7 % Tesla (TSLA) +6,3 % Tractor Supply (TSCO) -4,9 % QUALCOMM (QCOM) +6,3 % BUILDR FIRST O (BLDR) -4,4 % Zdroj: Reuters
Tesla stock TSLA rose on Monday, recovering some of last week's sharp losses after investors sold the stock despite a stronger-than-expected second-quarter delivery report.
The rebound came as the electric-vehicle maker expanded its robotaxi service to Miami, adding another city to its autonomous ride-hailing network.
Shares of Tesla climbed about 3% to $405.11 in early trading.
The move was also supported by broader market optimism, with the S&P 500 up 0.6% and the Nasdaq climbing around 1%.
The stock gained after Tesla announced that its robotaxi service became available in Miami from July 3, extending the company's autonomous ride-hailing footprint beyond Texas.
The expansion makes Florida the third state where Tesla's robotaxi operations are available.
The company launched its robotaxi service in Austin about a year ago and has since expanded to additional Texas cities. Tesla also operates a rideshare service in San Francisco.
The rollout forms part of Chief Executive Officer Elon Musk's broader strategy to position artificial intelligence, autonomous driving, and robotics as Tesla's next major growth engines.
Investors have closely watched the pace of Tesla's robotaxi expansion, although the rollout has remained gradual as the company prioritizes safety.
Tesla has said it does not expect robotaxis to become a meaningful contributor to revenue and earnings until at least 2027.
Sentiment has also improved following Tesla's second-quarter delivery report, which exceeded Wall Street expectations.
Tesla reported 480,126 global vehicle deliveries during the quarter, representing a 25% increase from a year earlier.
The company also reported that energy deployments rose 41%, extending the momentum of a business that has grown rapidly even as vehicle demand has fluctuated.
The second-quarter performance followed a 6.3% year-over-year increase in deliveries during the first quarter.
Gary Black, managing director of The Future Fund, said in a post on X that he expects Tesla shares to recover further as analysts revise their earnings forecasts.
"I expect TSLA stock to rebound this week as the sell-side climbs over one another to increase 2Q and FY'26 earnings ests," Black said, adding that higher earnings projections "could boost TSLA price targets."
Black nevertheless argued that Tesla's valuation remains demanding.
He said the stock trades at a 2026 price-to-earnings multiple of more than 200 times despite expected long-term earnings-per-share growth of roughly 35% between 2027 and 2032.
According to Black, that "continues to suggest TSLA is fully priced."
He also suggested that higher gasoline prices during the quarter may have contributed more to stronger vehicle demand than growing enthusiasm around autonomous driving.
Analysts maintain constructive outlookMorgan Stanley analyst Andrew Percoco said Tesla's second-quarter deliveries exceeded sell-side consensus estimates by 18% and represented the company's strongest vehicle growth since the third quarter of 2023.
The firm maintained its Equal Weight rating and a $415 price target.
Separately, Baird reiterated its Outperform rating and $522 price target after Tesla's second-quarter results surpassed both the firm's own forecasts and broader consensus expectations.
Baird also highlighted Tesla's energy storage business, noting that deployments reached 13.5 gigawatt-hours during the quarter, up approximately 41% year over year.
While acknowledging that energy deployments can be uneven from quarter to quarter, the firm described the results as a positive development and said its constructive outlook on Tesla remains unchanged.
Tesla is scheduled to report its full second-quarter financial results after the market closes on July 22.
Tesla, Inc. has shown strong operational improvements, with Q1 2026 revenue up 15.8% and margins expanding across key metrics. TSLA's vehicle deliveries and market share have rebounded, especially in Europe, despite prior setbacks from CEO controversies. Valuation remains extreme; even with optimistic growth and higher-margin businesses, TSLA trades at a 2030 P/E of 114.5 under favorable scenarios.
Key Takeaways Tesla expanded robotaxi services to Miami, FL, the third U.S. state after Texas and California.Austin, Dallas, Houston and Miami now use fully autonomous Model Y Robotaxis with no safety monitors.Musk sees wider unsupervised autonomy in late 2026, but Tesla's past delays keep the certainty in question. Tesla (TSLA - Free Report) is moving steadily toward CEO Elon Musk's vision of turning the company into an artificial intelligence and autonomous mobility leader, with its robotaxi business being at the center of that strategy. The latest milestone came with the launch of robotaxi services in Miami, FL. Florida is the third U.S. state where Tesla's autonomous ride-hailing platform is operating after Texas and California.
The Florida expansion is significant. Miami gives Tesla access to one of the country's busiest transportation and tourism markets. The broader South Florida region, including Fort Lauderdale, Palm Beach and Boynton Beach, attracts millions of visitors each year, allowing Tesla to introduce its robotaxi service to a much larger pool of potential riders.
TSLA Robotaxi Footprint ExpansionTesla's robotaxi journey began on June 22, 2025, when it launched limited commercial operations in Austin, TX. A month later, the company entered California by rolling out services across the San Francisco Bay Area, including San Francisco, San Jose and Berkeley. While the California service still relies on human safety monitors, it marked Tesla's first expansion beyond Texas.
By November 2025, Tesla had transitioned Austin to full commercial operations, strengthening its presence in its first launch market. The expansion accelerated in 2026 as Dallas and Houston joined the network in April, extending Robotaxi coverage across Texas. The latest addition of Miami now gives Tesla operations in three states, with active markets including Austin, Dallas, Houston, the San Francisco Bay Area and Miami.
Austin, Dallas, Houston and Miami feature fully autonomous Model Y Robotaxis with no driver or safety monitor inside the vehicle. Meanwhile, the Bay Area continues to use safety monitors during rides.
Is Tesla on Track for Musk's 2026 Goal?On Tesla's last earnings call, Musk said he expects fully autonomous vehicles that require no human safety monitors to become much more common across the United States during the second half of 2026.
The recent expansion in Miami marks measurable progress toward that target. Each successful launch provides additional real-world driving data, helping Tesla refine its autonomous driving software while demonstrating growing confidence in the technology.
Still, the race is becoming increasingly competitive. Rivals are rapidly expanding their own autonomous ride-hailing networks, with Alphabet's (GOOGL - Free Report) Waymo and Amazon's (AMZN - Free Report) -owned Zoox both investing heavily to secure a larger share of the emerging market. Waymo remains the clear industry leader, providing roughly 500,000 paid rides each week and operating commercially across 10 U.S. cities. The company is also preparing to expand internationally, with London and Tokyo being its first target markets. Meanwhile, Zoox is accelerating its own rollout, adding Dallas and Phoenix to its robotaxi testing program as it works toward commercial deployment.
For Tesla, the latest expansion shows the Robotaxi business is gaining traction. The company is widening its network while increasing the number of markets where vehicles operate without human supervision, representing meaningful progress toward Musk's long-term vision.
However, Tesla has repeatedly missed self-driving timelines in the past, making it too early to conclude that its broader goal of widespread unsupervised Robotaxis by the second half of 2026 is firmly within reach. The coming months will be critical in determining whether the company can maintain its expansion pace while satisfying regulators and proving the technology can safely scale.
Tesla’s Price Performance, Valuation and EstimatesTesla has underperformed the industry year to date.
Image Source: Zacks Investment Research
From a valuation perspective, Tesla appears significantly overvalued.
Image Source: Zacks Investment Research
See how the Zacks Consensus Estimate for Tesla’s EPS has been revised over the past 90 days.
Image Source: Zacks Investment Research
TSLA carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The EV landscape in the United States may be on the verge of a regime change.
Tesla sales and production numbers, reported Thursday, July 2nd, were very strong. The company reported producing 451,758 vehicles and delivering 480,126 vehicles - 18% higher than the consensus estimate of 406,600 deliveries.
Despite this, the stock did not perform particularly well. $1.5 trillion is a demanding valuation, approximately 15x trailing 12-month sales.
Meanwhile, much smaller EV competitor Rivian recently launched a mid-market SUV, the R2, targeting the most competitive segment currently led by the Tesla Model Y. How much smaller is Rivian? Tesla's market capitalization is, as I write this, $1.48 trillion. Rivian's market capitalization is $23.5 billion. Tesla sold nearly 1.64 million cars in 2025. Rivian sold just 42,247.
Tesla, YTD
But here's the thing: 96.9% of the cars Tesla sold last year were Model 3/Y. The Model S, X, and Cybertruck combined made up just 3.1%. Why does this matter? Because until now Rivian only competed with those expensive vehicles with their $100k+ R1S (roughly comparable to the Model X in price) and the R1T, which, in turn, as a pickup, comes closest in terms of target market to the divisively styled Cybertruck. Until now, Rivian only offered two very large and very expensive models. Now they have a vehicle aimed squarely at the largest market segment, mid-market SUVs, which, in EVs, has been dominated by the Tesla Model Y.
Holly IndexMy own grassroots consumer behavior analysis is summarized in what I call the "Holly Index." For years, my wife Holly's purchasing choices have served as a leading indicator for consumer discretionary spending trends. For example, for a long time, Lululemon, Starbucks, Costco, Apple, Nike and Tesla ranked highly, but several of these companies fell off the "Holly Index." By Christmas 2023, Lulu was replaced by Vuori (not publicly traded), Nike by ON Holding, and Starbucks by Equator and Blue Bottle. Costco remains, although more purchases are coming from Whole Foods now that their prices have come down after the company was acquired by Amazon, and Amazon returns could be dropped off there.
Apple remains on the list, but now, the most notable shift yet: after driving two consecutive Teslas, she just placed a reservation for a Rivian R2 for year-end delivery. I was not in the market for a vehicle myself, but it is tempting and appears well-positioned to compete not just with mid-sized electric SUVs but also with traditional mid-size ICE SUVs (which is what I drive).
When Tesla released its consensus-beating sales and delivery figures on Thursday, July 2nd, the stock fell notably. When a stock sells off on objectively good news, it signals that the good news is fully priced in. At these lofty valuations, it is difficult to identify the next catalyst that could structurally drive shares higher.
While the near-term trend favors Rivian, we must remain clear-eyed about its fundamental realities. Rivian is not yet profitable and is unlikely to achieve net profitability before 2030. The company currently holds roughly $4.8 billion in cash on hand, according to its most recent quarterly report. However, consensus street expectations indicate that Rivian will burn through approximately $9 billion before turning cash-flow positive. This suggests that a dilutive secondary or debt issuance is inevitable over the medium term. Because of this structural overhang, we want to express a modestly bullish stance via premium collection rather than chasing the stock following a nearly 45% rally from the mid-May lows.
Rivian, YTD
To capture this divergence, we are deploying two high-probability option structures:
RIVN August 21st 16 Puts - Sell to Open @ $0.85/contract (5.3% yield-to-strike over less than 2 months, worst case own the stock at $15.15/share, a nearly 19% discount to the closing price on Thursday, July 2nd.)
TSLA July 31st 420/425 Call Spread, Sell to Open @ $1.35/credit. Modestly bearish, this vertical call spread provides a defined-risk mechanism to harvest premium as Tesla consolidates or drifts lower, maximizing profit if the stock remains below $420 through the July expiration.
Did you know that the global electric vehicle (EV) market is estimated to be worth more than $1 trillion this year? That's according to projections from analysts and Fortune Business Insights. And despite the massive size of the market, they expect it will still more than double and be worth close to $2.2 trillion by 2034, which translates into a compounded annual growth rate of just under 10% over that stretch.
Two popular stocks that could benefit from these opportunities are Tesla (TSLA +5.75%), which is already a beast with a massive valuation, and Rivian Automotive (RIVN +6.12%), which recently launched a new, more affordable EV that it hopes will allow it to capture more market share.
Which EV stock is the better long-term buy?
Image source: Getty Images.
The case for Tesla Over the years, Tesla has built up a strong brand in the EV market. Its name has become synonymous with EVs and, of course, its CEO, Elon Musk. The company has been facing headwinds due to growing competition, and thus its margins have been shrinking. However, it has an advantage over other smaller EV makers in that its operations are already profitable.
While its profits may be shrinking, many competitors would simply love to just be profitable. Last year, Tesla reported $3.8 billion in profit on revenue of just under $95 billion. Meanwhile, its vehicles remain in high demand, with Tesla reporting that for the second quarter, it made 480,126 deliveries, eclipsing analyst expectations of less than 407,000 by a wide margin.
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Tesla's stock is down 9% this year, but with the company's CEO always focused on growth and the next phase of innovation, including robotics, Tesla can be one of the most exciting growth stocks to own over the long run. Although there have been bumps along the way, it has generated fantastic returns for long-term investors.
The case for Rivian At around just $27 billion in market cap, Rivian is a far smaller company than Tesla, which is worth close to $1.6 trillion. Thus, there can be much more significant upside for investors here if the company proves there is strong demand for its vehicles.
In the second quarter, Rivian delivered 12,194 vehicles, which was higher than analyst projections of 11,000. But this number could be far higher in future quarters with its new, more modestly priced R2 SUV now available and early demand exceeding expectations. The company has raised its full-year delivery expectations, now projecting between 65,000 and 70,000 deliveries, up from the 62,000 to 67,000 it previously expected.
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Last year, the company's revenue grew by more than 8% to $5.4 billion, and it reduced its net loss significantly, from $4.7 billion in the previous year to $3.6 billion. While it's still a sizable loss, the company is showing signs of progress. More importantly, from a cash flow perspective, it used up significantly less cash from its day-to-day operating activities: $779 million versus $1.7 billion a year ago.
It's a long road ahead for the company, but if it succeeds and is able to grow while becoming profitable, the gains for the stock could be significant.
There is a risk with both of these stocks. Tesla is trading at an extremely high valuation, while Rivian's lack of profitability and positive cash flow are big concerns as well. However, Tesla is ultimately the safer stock to own due to its stronger financials. Rivian has a considerably more challenging road ahead as its gross margin was just 9% last year, and with it offering a lower-priced R2 model, it may be even more challenging for it to improve its margins in the near future.
Tesla is the better buy when compared to Rivian, but it may still be too risky for many investors.
Tesla stock is showing upward movement. Why is TSLA stock advancing? What Is Driving TSLA’s Earnings Expectations?Over the weekend, investor Gary Black argued Tesla’s Q2 delivery beat was helped by an Iran war-driven spike in gas prices to $3.86 per gallon over the July 4 weekend, up from $2.98 per gallon before the conflict. He also said he expects TSLA to rebound this week as the sell-side raises Q2 and FY 2026 earnings estimates, which could flow through to higher price targets.
Tesla’s delivery debate remains unusually wide, with Black calling estimates "all over the place" while still modeling close to 410,000 Q2 units versus ~406,000 consensus, about a 7% YoY surge if realized.
Premarket trading is taking place against a constructive index backdrop, with S&P 500 futures higher by 0.5%, which can amplify moves in high-beta mega-cap names like Tesla when sentiment improves.
Critical Price Levels To Watch For TSLATesla is sitting in a choppy, mean-reversion zone: it’s trading 0.3% below the 20-day SMA ($399.16) and 0.1% below the 100-day SMA ($398.08), while still 5% below the 200-day SMA ($418.61). That mix typically reads as "range-bound" rather than cleanly trending, especially with price repeatedly gravitating back toward the high-$300s moving-average cluster.
From a levels standpoint, the stock is trying to stabilize above a nearby floor while overhead supply remains obvious from prior pivots.
Key Resistance: $453.00 — a round-number area where rebounds can stall, and it sits well above the current moving-average cluster Key Support: $393.50 — a nearby pivot zone that’s close to current price and can act as the first "line in the sand" for dip-buyers TSLA Earnings Preview: What Analysts Expect for July 2026Looking further out, the next major catalyst for the stock arrives with the July 22, 2026 (confirmed) earnings report.
EPS Estimate: 44 cents (Up from 40 cents YoY) Revenue Estimate: $25.24 Billion (Up from $22.50 Billion YoY) Valuation: P/E of 361.0x (Indicates premium valuation) Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price target of $398.55. Recent analyst moves include:
Freedom Broker: Hold (Raises Target to $420.00) (July 2) Morgan Stanley: Equal-Weight (Maintains Target to $415.00) (July 2) Truist Securities: Hold (Raises Target to $430.00) (July 2) Tesla’s Benzinga Edge Rankings: Strengths and WeaknessesBelow is the Benzinga Edge scorecard for Tesla, highlighting its strengths and weaknesses compared to the broader market:
The Verdict: Tesla’s Benzinga Edge signal reveals a growth-heavy profile with mixed momentum and a very weak value score. For longer-term bulls, that usually means the chart needs to confirm (via reclaiming major resistance), because the valuation leaves the stock more sensitive to earnings-estimate changes.
TSLA Stock Price MovementTSLA Stock Price Activity: Tesla shares were up 0.20% at $394.24 at the time of publication on Monday, according to Benzinga Pro data.
Image: Shutterstock
Market News and Data brought to you by Benzinga APIs
By all accounts, the stock should be up. Deliveries and production of its electric vehicles (EVs) were both up sequentially and year over year, handily topping analysts' expectations.
Yet Tesla (TSLA 7.35%) shares tumbled on Thursday after its report showed it delivered 480,126 EVs during the three months ending in June while also manufacturing 451,758 automobiles. Most analysts were only looking for deliveries of a little over 400,000.
Data source: Tesla. Chart by author.
Importantly, strong deliveries cleared out Q1's concerning inventory buildup. The strong numbers confirm that the company can not only consistently make automobiles in large numbers but also that its brand still enjoys a certain marketability cache. It just wasn't enough to satisfy investors.
But there's more to the story.
Several stumbling blocks, all of which may have tripped the stock up There are a handful of theories about this stock's setback. And all of them are reasonable. All of them may have contributed to the sell-off, too.
The prevailing explanation is that American automakers Ford Motor Company and General Motors both suffered severe drop-offs in their U.S. electric vehicle businesses in Q2, which has obvious bearish implications for Tesla as well.
Image source: Getty Images.
It's not necessarily doing as well as it seemingly should be overseas, either. Although the company doesn't divulge regional unit data, the China Passenger Car Association reports that over half of Tesla's Q2 deliveries were made in China, where Tesla is doing well but not as well as its top EV rival BYD (BYDDY +3.68%). BYD delivered nearly 400,000 new-energy vehicles within China in June alone, versus only 89,091 Tesla-made EVs. Moreover, after a catastrophic drop in BYD's global deliveries in Q1 -- to levels below Tesla's -- the Chinese company bounced back last quarter, delivering a Tesla-beating 557,090 units worldwide.
Then there's the simple possibility that this is nothing more than a "buy the rumor, sell the news" event, where good news is already priced into a stock. Once the news is reported, there's nothing else new to price in. The next move from that ticker's recent buyers is an exit. To this end, Tesla shares had rallied 12% in just the three days leading up to Thursday's report, setting the stage for profit-taking.
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Or, maybe investors were simply trying to clean up their portfolios before U.S. exchanges closed for a three-day holiday weekend.
Don't overthink it Regardless of the reason, Thursday's sizable sell-off doesn't necessarily mean much and certainly doesn't change the stock's overarching investment thesis. Tesla has always been a volatile ticker, pushed and pulled by an ever-changing global EV market, energy storage market, and soon, the AI robot market. You own this name for the long haul because it's a leading brand and has the greatest potential to capitalize on these industries' ongoing growth. That's also why you pay a premium for it.
To this end, all the post-report noise and chatter aside, Tesla's second-quarter delivery and production numbers are precisely the sort of progress and resiliency the bulls want to see ... at least on the EV front.
Wedbush analyst Dan Ives has put the likelihood of a merger between Tesla (TSLA 7.35%) and Space Exploration Technologies (SPCX +2.69%) at more than 80% over the next year, as the potential deal fits Elon Musk's broader artificial intelligence (AI) and data strategy.
Tesla invested $2 billion in SpaceX earlier in 2026, and that investment has given Tesla nearly 19 million SpaceX shares, representing less than 1% of SpaceX's outstanding shares.
Now, the bigger question for Tesla investors is whether a full merger would create a stronger AI, energy, connectivity, and robotics platform or dilute Tesla shareholder value by adding SpaceX's losses, heavy spending needs, and governance risks.
Image source: Getty Images.
Increasing credibility of the merger case SpaceX's June 2026 IPO has given the company a public stock price for the first time, which makes a possible stock-based merger of the two Elon Musk companies easier to value and structure.
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SpaceX would bring a growth engine that Tesla does not have. In 2025, SpaceX revenue rose to $18.7 billion, with the Starlink-powered connectivity unit accounting for about $11.4 billion of sales. Starlink's satellite internet user base had reached nearly 10.3 million by the end of the first quarter of 2026. If Tesla and SpaceX merge, Starlink would add a recurring-revenue business tied to satellites, consumer connectivity, and future mobile services.
Tesla is already spending heavily on AI, robotics, custom chips, and manufacturing capacity. The company raised its 2026 capital spending plan to more than $25 billion, up from its earlier $20 billion forecast. Tesla also expects negative free cash flow for the rest of 2026, despite generating $1.44 billion in free cash flow in the first quarter.
A merger with SpaceX could position Tesla as a broader platform company and create a more vertically integrated platform spanning AI, energy, mobility, and connectivity. Tesla would bring vehicles, robotaxis, Optimus robots, energy storage, and software-led services that generate customer demand. SpaceX would bring satellites, launch capacity, mobile connectivity, AI infrastructure, and xAI-related software needed to connect, power, and scale that platform.
Potential synergies Reuters reported that SpaceX and xAI bought about $650 million in goods and services from Tesla in 2025, including $506 million in Tesla Megapack batteries and $131 million in Cybertrucks. With Tesla already supplying energy storage and vehicles to other Musk-controlled businesses, a merger could build on existing business relationships rather than relying solely on promised future synergies.
Tesla's energy storage business could generate an estimated $18.3 billion of revenue in 2026, with gross profit of about $5.3 billion and gross margin near 29%. Since SpaceX and its xAI need large-scale power storage for AI and communications infrastructure, Tesla's Megapack business could become a more strategic internal supplier.
Reuters has also reported that SpaceX, xAI -- which it acquired -- and Tesla plan to build two advanced chip factories at the Terafab facility in Austin, Texas, including one for Tesla vehicles and Optimus robots and another for future AI data centers in space. Tesla and SpaceX are also working on Macrohard , an early-stage AI platform designed to automate digital workflows and improve how people work with computers. These projects make the case for a merger more concrete by showing that Tesla and SpaceX may already be developing shared technology, not just operating under the same CEO.
The Federal Communications Commission has approved 7,500 additional Gen2 Starlink satellites, bringing SpaceX's permitted Gen2 capacity to 15,000 satellites. SpaceX is also pushing deeper into direct-to-cell and U.S. mobile services. Over time, that could help Tesla's vehicles, robotaxis, charging sites, and energy assets stay connected. However, this is more of a future opportunity than something likely to add meaningful revenue right away.
SpaceX's next-generation Starship reusable rocket system is designed to carry more than 100 metric tons to orbit. If it works reliably, SpaceX could deploy larger satellite networks and future space-based infrastructure at lower cost, strengthening a combined company's infrastructure story. But investors should also treat this as a major execution risk, not a guaranteed advantage.
Tesla investors face risks The biggest challenge for a merger deal would be SpaceX's rich valuation. As I write this, the company trades at 77 times trailing-12-month sales, despite posting a $4.9 billion net loss in 2025. The company's AI business also had a $6.4 billion operating loss in 2025 and accounted for $12.7 billion of the company's capital expenditures that year. A merger could move those losses, capital needs, and AI-infrastructure risks closer to Tesla shareholders.
Tesla also has major execution risks of its own. Reuters found that its robotaxi service in Texas still faced long wait times, limited availability, navigation problems, and safety challenges in some vehicles. If Tesla is still proving vehicle autonomy and SpaceX is still proving AI infrastructure, a merger would combine two long-term bets rather than clearly reducing risk.
CEO Elon Musk reportedly controlled 42.5% of SpaceX's equity and 83.8% of its voting power before the IPO. After the offering, Musk was expected to retain about 82.4% of SpaceX's voting power. He also owns around 19.9% stake in Tesla's common stock.
Musk's level of influence could make a Tesla-SpaceX deal easier to pursue, but it also makes fairness more important. Tesla shareholders would need confidence that the deal price properly reflects SpaceX's losses, Tesla's own growth potential, and the companies' existing business ties.
So, the real question for shareholders is whether the deal would create more value than Tesla and SpaceX could create separately. Until investors see terms, valuation, board process, and a clearer path from synergy to cash flow, a potential merger should be treated as a serious possibility rather than a proven value creator.
Two companies that agree on almost nothing closed Thursday agreeing on exactly one thing: what they're worth. Meta Platforms (META 4.80%) and Tesla (TSLA 7.35%) each ended the week at a market value of about $1.48 trillion.
Meta got there by falling. Its shares sit about 27% below their 52-week high, including a 4.9% slide on Thursday alone, as investors fret over its swelling spending plans and what artificial intelligence (AI) chatbots and agents could mean for its advertising machine. Tesla got there by falling, too -- about 21% below its high -- but on the same day it reported second-quarter deliveries up about 25% year over year.
Same price tag, very different businesses. Which one wins from here?
Image source: Getty Images.
Meta's first quarter made the bear case harder to hold. Revenue rose 33% year over year to $56.31 billion, and the growth came from both levers of the social media giant's ad business: impressions climbed 19% while the average price per ad rose 12%. About 3.56 billion people used its apps daily in March, up 4% from a year earlier -- a figure that dipped slightly from the prior quarter on internet disruptions in Iran and a WhatsApp restriction in Russia, offering a reminder of how much of the planet this network already covers.
Meta's profits remain impressive, too. The social network's operating income rose 30% to $22.9 billion, holding the company's operating margin at a staggering 41%. Reported earnings per share of $10.44 were aided by an $8.03 billion one-time income tax benefit, but even stripping that out, earnings per share grew by double digits.
Meanwhile, the bear case for the stock is about the bill. Meta raised its 2026 capital expenditure outlook to $125 billion to $145 billion, citing pricier components and additional data center costs. Total costs already grew 35% last quarter, faster than revenue -- an early hint of that spending reaching the income statement.
But at about 19 times forward earnings, much of that worry appears to be priced in already.
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Tesla: the case at $1.48 trillion Tesla's recent news flow looks better than its stock. The company delivered 480,126 vehicles in the second quarter, its strongest second-quarter volume in years -- and the market sold the report anyway, sending the shares down 7.5% in a day.
The reason for this disconnect probably lies in the income statement. In the first quarter, Tesla's revenue grew 16% year over year while it posted a 4.2% operating margin, and the company has earned just $1.10 per share over the past 12 months. And even on analysts' consensus forecast for earnings per share over the next 12 months, the stock trades above 200 times -- about 10 times Meta's forward multiple.
What that price buys is the future: an autonomy business that took a visible step on Friday, when Tesla's robotaxi service began carrying riders in Miami, its first market outside Texas and California. The expansion cadence is encouraging. But the revenue from it, for now, is not disclosed and almost certainly small.
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Which one wins from here? Given Tesla's low earnings today, its stock is clearly priced almost entirely on future expectations, while Meta's is based on the strong profits it's already producing.
Meta produced $22.9 billion of operating income in a single quarter. And Meta's 33% revenue growth rate is double what Tesla's revenue managed in its most recent reported quarter.
For the same $1.48 trillion, one stock offers 33% revenue growth at about 19 times forward earnings. The other offers 16% growth at more than 200 times, plus a claim on robotaxis and humanoid robots whose economics one can only speculate about.
So, which stock do I think will outperform from here?
Meta.
Sure, we can't completely rule out the possibility that Tesla ends up winning over the long haul. If its Robotaxi business morphs into a high-margin operation and it scales humanoid robots profitably, profits could soar, and the stock could benefit. But the value proposition for Meta stock simply asks investors to believe a business already growing 33% keeps executing.
When two businesses are priced the same, I'd rather own the one whose results, not ambitions, carry the price -- especially when the underlying earnings are this far apart. With that said, I'd revisit that view if Tesla starts publishing robotaxi economics that support the excitement -- or if Meta's spending stops showing up as growth.
Tesla (NASDAQ:TSLA | TSLA Price Prediction) and BYD (OTC:BYDDF) sit at opposite poles of the electric vehicle world.
Tesla just posted a sharp Q1 margin rebound while pouring cash into robotics and autonomy. BYD, the world’s largest new energy vehicle maker by volume, keeps flooding global markets with affordable EVs and plug-in hybrids. The businesses barely resemble each other anymore, which is exactly why this quarter is worth comparing.
Margin Recovery Lifts Tesla. Volume and Vertical Integration Anchor BYD. Tesla’s Q1 2026 print was a genuine turnaround quarter. Revenue hit $22.387 billion, up 15.78% year over year, and automotive gross margin snapped back to 21.1% from 16.2%. Operating income jumped 135.84% to $941 million. That is a real profitability inflection after a brutal 2025, when full year net income fell 46.79%.
The mix tells the story. Services and other revenue climbed 42% as FSD active subscriptions reached 1.28 million, up 51% year over year. Software is finally showing up in the P&L. Energy revenue slipped 12%, a rare soft spot after a record 2025.
BYD’s business runs on a different engine. It builds Blade Battery cells in-house, sells across the Dynasty, Ocean, Denza, Yangwang, and Fang Cheng Bao brands, and pushes hard into Europe, Southeast Asia, and Latin America. Chairman Wang Chuanfu has kept the company obsessively focused on cost per vehicle and battery supply, not autonomy software.
Robotaxi Bet vs. Sub-$15,000 EV Bet Lens Tesla BYD Core bet FSD, Robotaxi, Optimus Affordable EVs and PHEVs at scale Vertical edge Custom AI silicon with SpaceX fab Blade Battery and in-house electronics Key vulnerability Autonomy timelines slipping China tariffs in EU and US Tesla’s $1.95 billion R&D quarter, unsupervised Robotaxi launches in Dallas and Houston, and Optimus lines designed for 1 million robots per year in Fremont point to a software and robotics endgame. Prediction markets are less convinced. Polymarket traders put only a 0.1 probability on an Optimus release by year-end and just 0.22 on a California Robotaxi launch by December 31.
BYD is taking a different path, undercutting legacy automakers on sticker price and betting anti-involution policy support flagged by Morningstar will consolidate share toward Chinese EV conglomerates such as BYD and Geely.
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Deliveries, Tariffs, and Whether Software Revenue Compounds I will be watching Tesla’s Q2 delivery cadence, the Cybercab pilot ramp at Gigafactory Texas, and whether FSD subscriber growth keeps compounding above 50%.
For BYD, tariff outcomes in Europe and export volumes into ASEAN and Brazil are the swing factors. You should also keep an eye on battery pack capacity, which Tesla flagged as its limiting factor on vehicle production.
Why I Lean Toward BYD on Value, Tesla on Optionality Tesla trades at a forward P/E of 217 with a $421.16 analyst target against a current $393.45. The stock is down 12.51% year to date after a 7.49% single-day drop.
BYD shares sit at $10.20, off 34.3% over one year. If I want optionality on autonomy and robotics, Tesla is the vehicle, and I accept the multiple.
In case I want an operationally excellent, cash-generative automaker at a beaten-down price, BYD looks more interesting to me. If input costs and tariff policy stay volatile, I would rather wait than force either position.
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It may have been a short trading week, but Cathie Wood kept busy with her long positions. The founder and CEO of Ark Invest was actively making moves across her collection of ETFs, buying and in some cases selling investments. Let's talk about some of the latest purchases.
Ark was a buyer of Tesla Motors (TSLA 7.35%), SoFi Technologies (SOFI 1.06%), and Recursion Pharmaceuticals (RXRX +3.54%) on Thursday. Tesla shares fell more than 7% on the final trading session ahead of the Independence Day market holiday. SoFi and Recursion are trading 44% and 47% below their 52-week highs, respectively. Wood can be aggressive when it comes to growth investing, so let's take a closer look at these three stocks.
Image source: Getty Images.
1. Tesla Motors The world's most valuable automaker by market cap is also Wood's largest position. Wood has a $1 billion position in Tesla across all of Ark's ETFs. Tesla stock tumbled 7.5% on Thursday after posting its production and delivery results for the second quarter.
Despite the market's uninspired reaction, the numbers were better than expected. Tesla delivered 480,126 vehicles through April, May, and June, a 25% increase from the 384,122 sedans and Cybertrucks it moved a year earlier. It's the strongest quarter for Tesla deliveries since the third quarter of last year, when the 497,099 vehicles delivered were fueled by the expiration of federal tax credits in the U.S. of up to $7,500. Analysts had been forecasting only 406,024 deliveries a week earlier.
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Tesla's jump wasn't the result of a turnaround in U.S. sales. It was a sharp spike in fuel prices that sparked demand across Europe. Investors will take it. After its first year of declining revenue in 2025, the positive rebound in the first quarter wasn't a fluke.
It's also worth noting that Tesla produced only 451,758 vehicles during the quarter. After back-to-back periods of producing more units than it could deliver, Tesla cleared out some of its excess inventory.
The strong deliveries don't guarantee a blowout performance when Tesla reports its second-quarter results on July 22. There was heavy promotional activity to move cars, particularly in Europe. Revenue should come in strong, but will margins suffer as a result of the incentives provided to improve its inventory situation? Wood seems to think that Tesla will do just fine.
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2. SoFi Technologies Here's a fun fact about digital branchless bank SoFi Technologies: Ark added to its stake in the company every single trading day this week. SoFi has grown into a platform with 14.7 million members, a 35% jump over the past year.
Are you familiar with the Rule of 40? It's a metric used primarily to gauge the growth health of software-as-a-service companies, but it also applies to subscription-based fintech platforms. SoFi continues to kill it on that front. To calculate the score, take a company's reported or adjusted revenue growth, which in SoFi's case was 41% in adjusted top-line growth for its latest quarter. Then add a cash flow profitability metric, which for SoFi is its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Its adjusted EBITDA margin was 31% for the quarter, giving it a score of 72. Anything above 40 is a sign of a fast-growing company that is getting the job done without sacrificing its operating efficiency. SoFi has been holding up well north of 40 on this front for more than four years.
The shares aren't cheap, even after SoFi stock's 30% decline in 2026. It's currently trading for 31 times forward earnings and 23 times next year's analyst profit target. This is reasonable given its strong growth, but it's also high among financial services stocks.
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3. Recursion Pharmaceuticals Finally, we have Recursion Pharmaceuticals. It's one of the smaller companies in Ark's portfolio, with a market cap of $2 billion. It also trades at a small price, just below $4 per share. Ark owns roughly $115 million of the stock, so more than 5% of all shares outstanding.
Recursion is using artificial intelligence to reinvent the drug discovery process. The clinical-stage techbio company has just $66 million in trailing revenue, and losses have widened with every passing year. This isn't a bet that will pay off right away. It has already attracted some notable investors and believers, and they know they'll have to wait for a major windfall. Wood isn't known for her patience, but she's certainly a believer right now.
Bill Ackman has made it clear: He wants to be the next Warren Buffett. That's easier said than done, to be sure. But the fund manager in charge of Pershing Square has revamped his investment style since his activist days and runs a concentrated portfolio of long-term, mostly passive holdings.
So, it's no surprise that Ackman's investment decisions are rooted in the same investment philosophy as Warren Buffett's. That said, Ackman has notably invested in one area Buffett historically avoided: technology stocks. Some of Ackman's largest holdings are the big tech stocks Amazon, Microsoft, and Meta Platforms. When asked why Ackman is interested in those companies but not other members of the "Magnificent Seven," such as Tesla (TSLA 7.35%), Ackman's response echoed wisdom shared by Buffett over the years.
Image source: Tesla.
Ackman likes Tesla's products and has a lot of respect for its CEO, Elon Musk. Ackman even said in a recent interview that he drives a Tesla. But Tesla's stock has become detached from the current product it sells: the car that Ackman, who can purchase any car he likes, has chosen to use.
"To own Tesla at today's valuation, you have to make some grand assumptions about robotics and other things that they're going to achieve over time," Ackman said. "Our portfolio is comprised of businesses where we, with a very high degree of confidence, can predict the cash flows over a very long period of time. I think it's very hard to do that with Tesla."
Tesla's stock currently trades for over 200 times forward earnings estimates. It's an automaker trading at 15 times sales, while other car companies trade at sales multiples below 1. While its vehicle deliveries are growing about 10% year over year and expected to continue doing so through 2030, that's far from justifying the enormous multiples on the stock.
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Indeed, Tesla is a $1.5 trillion company because investors expect it to earn tremendous profits from developing autonomous vehicles and humanoid robots in the future. The vast majority of bull cases for Tesla, such as Ark Invest's valuation, stem from its fledgling robotaxi efforts. And now Musk is dedicating a significant amount of Tesla's manufacturing capacity to its humanoid robot, Optimus, which is a massive bet on labor disruption.
How either effort will play out is very hard to predict. And if Ackman can't predict it with a high level of confidence, he stays away. It's that simple. It's the same philosophy Buffett used.
Tesla could go on to scale both very quickly and very profitably, but it could also fall flat. As Buffett said in his 1996 letter to shareholders, "I would rather be certain of a good result than hopeful of a great one." And that defines Ackman's focus when evaluating companies in today's market.
The companies that Ackman can predict with certainty While Buffett mostly stayed away from tech companies due to the industry's rapidly changing landscape, Ackman sees some parts of the sector as far more predictable than others. That's true even in artificial intelligence, where multiple companies are constantly pushing the boundaries of innovation. In particular, he holds significant stakes in Amazon, Microsoft, and Meta.
The first two companies operate the world's largest public cloud platforms: Amazon Web Services and Microsoft Azure. Both have seen tremendous demand amid the AI boom, prompting them to spend large sums of capital building out capacity. Both plan to spend around $200 billion on building and outfitting new data centers this year. That spending is weighing on both companies' free cash flow for the year and their stock prices.
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However, that spending comes with a high degree of certainty that the companies will see a good return on investment. Amazon Web Services had a backlog of $364 billion in contracted revenue as of the end of the first quarter, plus it signed a $100 billion deal with Anthropic that's not included in that amount. Likewise, Microsoft has $627 billion in remaining performance obligations across Azure and its productivity software business. Both should see their cloud revenue accelerate in line with the acceleration in their capital expenditures.
Meanwhile, Meta could be one of the biggest beneficiaries of advances in generative AI thanks to its tremendous scale. Improvements in recommendations, ad creation, and targeting have increased both engagement and ad pricing, resulting in strong revenue growth in the core advertising business. Generative AI also opens new opportunities for business AI chatbots on its messaging apps, which could be a massive revenue stream down the road. Management has also seen strong engagement with its own chatbot, Meta AI, which could be another monetization avenue.
Importantly, all three companies are currently trading at historically low valuations. That means there's significant room for error in any predictions about future cash flows. And while all three are certainly poised to deliver strong operating results over the long run, their current stock prices discount future earnings more than those of many other AI stocks, including Tesla. That combination of predictability and price is what gives Ackman the confidence to make them significant positions in his portfolio.
A large percentage of AI stocks already trade at a rich premium. So despite these companies' promising long-term revenue growth potential, investors may not profit as much as they predict.
To realize the biggest profits, AI investors must find AI stocks trading at low valuations. This is easier said than done. The trick isn't necessarily to buy out-of-favor AI stocks -- as very few exist at this time -- but to find stocks that the market doesn't yet realize are AI stocks. This way, investors can buy into AI stocks without the AI stock premium.
After falling 20% in value since 2026, the business below looks like a promising bet for AI investors looking to avoid the AI premium.
The market still doesn't appreciate this is an AI stock Rivian Automotive (RIVN +8.44%) is my favorite AI stock for the second half of 2026. But wait, isn't Rivian an electric vehicle (EV) stock? It is. But just like Tesla, the company has pivoted hard toward AI to power its autonomous driving ambitions.
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At one time, the market did appreciate Rivian's AI pivot. Last year, from Nov. 4 to Dec. 19, shares nearly doubled in value. What was the cause? The surge was at least partially due to the company's first "AI Day," which was held on Dec. 11.
During that event, Rivian announced several key strategy shifts. The company's future would no longer be tied simply to producing consumer-grade vehicles. Instead, technology would become the unmistakable focus. For example, Rivian now plans to produce its own AI chips, invest so heavily into self-driving software that it no longer expects to be profitable by 2027, and integrate AI more heavily into its production process to reduce costs and improve throughput.
Image source: Getty Images.
Quite quickly, however, the hype surrounding Rivian's AI event faded. Shares have lost nearly one-third of their value since Dec. 19. But when you look at the numbers, there's plenty of reason to remain bullish. This year, analysts expect sales to grow by around 31%. Next year, sales growth should jump to 64%.
This growth is largely due to Rivian's launch of its first affordable vehicle priced under $50,000: its R2 SUV. Production and sales growth are just now beginning to scale. Long-term, however, Rivian's pivot to AI is already paying off. In March -- just a few months after its first AI event -- Uber Technologies placed a $1.25 billion order for up to 50,000 Rivian R2s. Uber wants to scale its own robotaxi service. And it's apparently so bullish on Rivian's technology that it wanted to make sure it could secure plenty of vehicles as that business emerges.
It's not yet clear how this order will translate into accounting revenue, given it was structured as a direct investment. But it's a clear sign that well-funded robotaxi operators like what they see coming out of Rivian. Rivian shares still trade at just 3.4 times sales. As its AI pivot gains traction, expect that valuation to improve.
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