Track market-moving stories before they get noisy

SpaceX ramped up spending on energy products from CEO Elon Musk's other trillion-dollar company, Tesla, during the period ending June 30, 2026, financial filings revealed.

Musk's aerospace and defense tech conglomerate purchased $295 million worth of Tesla Megapacks, or battery energy storage systems, that SpaceXAI has been installing to help power its Colossus data centers in the Greater Memphis area.

The second-quarter purchases bring SpaceX's half-year total spending on Tesla Megapacks to $329 million.

Megapacks are used for business and utility-scale developments, and Tesla's newer Megablocks are a combination of four Megapacks around one transformer. The systems use lithium-ion or other battery cells and help data centers and utilities avoid blackouts, allowing for energy storage from all sources, including fossil fuels and renewable and intermittent sources like solar and wind.

Tesla is not the only company making battery energy storage systems. Top competitors, according to research by Wood Mackenzie, include China's Sungrow, BYD, CATL, Korea's LG, and U.S.-based Fluence, among others.

At the SpaceXAI Colossus and Colossus 2 facilities in Greater Memphis, the company has also installed and used dozens of natural gas-burning turbines for power generation.

Emissions and noise from the turbines have led to community uproar, and helped fuel a national backlash against data center developers, with Greater Memphis residents complaining of the smell, health problems, noise and air pollution.

Read more CNBC tech newsSpaceX revenue jumps 92% and AI costs soar in first earnings report since IPONJ files antitrust suit against Amazon, alleging it unlawfully wielded power over delivery contractorsPalantir stock skyrockets on 'otherworldly' commercial revenue — here's what's driving the demandHow the 'Baby iPhone' and an Apple supplier leak explain China's recent supply chain movesThe NAACP has sued SpaceXAI, which was formerly known as xAI, in a federal court in Mississippi to try to stop Musk's company from the continued use of the turbines without pollution controls or federal permits.

On SpaceX's second-quarter earnings call, Musk said the company also plans to rapidly expand its AI infrastructure and power plants.

"Our tentative target is to actually have 20 gigawatts of power and cooling live online by the end of next year," he said.

Some projects "won't pan out exactly on time," he added, "but I would expect that we'd still probably have at the, at the power plant level, something close to 15 gigawatts."

Last year, before it was a publicly traded company, SpaceX bought $506 million of Megapack products from Tesla, and spent another $131 million on Tesla Cybertruck vehicles, which it said were purchased at manufacturer's suggested retail prices without discounts.

The Cybertruck purchases by SpaceX came as consumers' interest in the angular steel pickups had waned, and following a myriad of safety recalls. SpaceX did not disclose any further purchases of Cybertrucks in the first half of 2026.

watch now

ToplineSpaceX’s stock once again took a hit on Wednesday after the rocket maker posted its first-ever earnings report, which seemingly spooked investors and analysts after the Elon Musk-led firm announced a sixfold increase in quarterly spending.

Elon Musk’s rocket maker said its quarterly spending surged sixfold.

NurPhoto via Getty Images

Key FactsShares of SpaceX fell 13% to around $109 as of Wednesday afternoon, approaching an all-time low of $104.

SpaceX on Tuesday reported quarterly revenue of $7.81 billion and a loss per share of $0.09, beating Wall Street estimates of $6.9 billion and a loss of $0.26, respectively, according to FactSet, as the firm’s net loss narrowed to $541 million from $1 billion.

The rocket maker said it spent $18.3 billion in its second quarter, $15.8 billion of which went toward AI, exceeding estimates of $13.2 billion, as SpaceX’s capital expenditures totaled $28.5 billion in the first half of this year—that marks a sixfold increase over last year’s nearly $7 billion.

Both Musk and Bret Johnsen, SpaceX’s chief financial officer, tried to cool concerns about the ramp-up in spending during an earnings call: Johnsen said “all capex is not the same,” especially when it comes to AI, to which Musk announced to shareholders SpaceX planned to build AI data centers in space using Nvidia chips exclusively.

Musk also said SpaceX now expects revenue to top $1 trillion by 2030 and potentially by 2029, down from his earlier projection for 2031.

how did economists react to spacex earnings?Some brokerages appeared optimistic about SpaceX’s quarterly earnings: JPMorgan analysts, who lifted their price target for shares to $240 from $225, wrote SpaceX is benefiting from “extreme vertical integration” while noting its “pace of change in AI is incredibly fast,” and that a step-up in AI infrastructure and higher monetization could push SpaceX’s AI revenue to $100 billion in 2027. Wells Fargo analysts cut their price target for SpaceX shares to $215 from $230 amid broader caution about its AI spending, noting that SpaceX was “off to an ambitious start” and that revenue projections for 2027 and 2028 were higher than expected, but so were capital expenditure estimates. Kathleen Brooks, research director at the brokerage XTB, told The Wall Street Journal, “The concern for investors is how fast expenditure growth is outpacing revenue growth.”

what to watch forA stray piece of a SpaceX rocket that floated in space over the last year likely crashed into the moon early on Wednesday, the BBC reported, though images of the collision have yet to be processed. The rocket is believed to have crashed near the Einstein Crater, located on the other side of the moon from the Apollo 11 landing site in an area that receives daylight and is visible from Earth.

crucial quoteChris Beauchamp, IG’s chief market analyst, told CNBC: “Part of a SpaceX rocket crashing into the moon this morning is probably a good metaphor for the share price performance so far.”

surprising factIf SpaceX shares fall below $100, that would imply investors saw no value from the rocket maker’s AI business, Morgan Stanley analysts wrote last month. Some already see “zero or negative value” as SpaceX ramps up its spending on space and connectivity amid “largely uncertain economics,” the analysts said.

forbes valuationMusk’s net worth was cut by $81 billion to $701.5 billion in SpaceX’s decline, according to Forbes’ estimates. His fortune swelled by more than $57 billion ahead of SpaceX’s earnings report on Tuesday, and a reduction on Wednesday still has his net worth well above that of Google co-founder Larry Page ($309 billion) and Amazon’s Jeff Bezos ($278.3 billion), who rank as the second- and third-richest people in the world, respectively.

key backgroundThe earnings report marks the first quarterly financial update from SpaceX since its historic trading debut in June. SpaceX shares have lost more than half their value since hitting an all-time high above $220 by June 16, when Musk’s fortune topped $1.45 trillion, even as analysts still appeared bullish about the company’s business prospects. Not much has pushed SpaceX shares toward the green, even after a successful Starship test launch last month that later resulted in the stock stumbling by nearly 5%.

further readingForbesElon Musk’s Wealth Sinks Below $700 Billion As SpaceX Rout ExtendsBy Ty Roush

If you're a contrarian investor looking to pick up companies at a bargain price, then this may be a good time to consider Elon Musk and his trillion-dollar enterprises. Both Tesla (TSLA -1.62%) and Space Exploration Technologies (SPCX -10.74%) have been struggling in recent weeks, with Tesla falling nearly 20% since June 19 and SpaceX falling by 40%.

SpaceX has been the big loser, losing nearly $1 trillion in market cap in the last six weeks, while Tesla has lost $220 billion. Musk's companies have gone from a collective capitalization of $3.94 trillion to $2.75 trillion.

Company

Market Cap on June 19, 2026

Market Cap on Aug. 3, 2026

Tesla

$1.5 trillion

$1.28 trillion

SpaceX

$2.44 trillion

$1.47 trillion

Combined

$3.94 trillion

$2.75 trillion

Data source: Companiesmarketcap.com.

So, is it time to make a contrarian bet? As with most things in investing, it depends on what your goals are, and how much more you're willing to accept in losses before either of these companies bounces back.

Image source: The Motley Fool.

SpaceX and Tesla will be bumpy The challenges for Tesla and SpaceX center on the build-out and acceleration of artificial intelligence. Both companies have extremely ambitious goals, and they have to spend billions and borrow even more just to have a chance of achieving them.

Tesla announced that its capex doubled sequentially in the second quarter, and the company is planning for $25 billion in capex this year while borrowing $30 billion. Tesla stock fell 18% the week after its report, marking the company's worst since 2022.

Today's Change

(

-1.62

%) $

-5.30

Current Price

$

322.05

Tesla's AI spending is heavily focused on its Optimus robot line, which Elon Musk hopes to begin selling on the commercial market next year. But mass production at the company's Fremont, California, factory hasn't yet begun, and it's far from a certainty that Musk's bet on his so-called "robot army" will pay off. Tesla is also working to perfect full self-driving technology for its vehicles, hoping regulators will approve unsupervised full self-driving cars at some point.

SpaceX's challenges are even bigger. The company has identified a total addressable market of $26.5 trillion in artificial intelligence and hopes to build orbital data centers that would power AI enterprise applications.

But doing so means going deeply into debt. Goldman Sachs, the lead underwriter for SpaceX's IPO, has projected that SpaceX will have a negative free cash flow of $105 billion in 2029 before rebounding to a positive FCF of $72 billion by 2031.

Today's Change

(

-10.74

%) $

-13.46

Current Price

$

111.87

And remember, IPO stocks are notoriously volatile, particularly as their lockup periods expire. SpaceX has an unusual lockup period. Rather than waiting 180 days before insiders sell their shares, the company allows investors to sell up to 20% of their stock two days after its first quarterly earnings report. That means as many as 912 million shares of SpaceX stock -- more than double the current available supply -- could potentially hit the market as early as Aug. 6.

Is this a good time to buy Tesla and SpaceX on the dip? If you're a long-term investor who thinks that Tesla and SpaceX can achieve their lofty goals, then it's really never a bad time to accumulate shares. But you should be aware that both companies face challenging quarters ahead. If you're a Tesla or SpaceX bull, be sure to keep your shares as part of a well-balanced portfolio to reach your goals.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Tesla (NASDAQ:TSLA | TSLA Price Prediction) shareholders have lived through a whiplash 2026, and holders of the leveraged version have felt every jolt twice. Shares of the electric-vehicle maker are down 27.21% year to date through Tuesday’s close of $327.35, yet the stock just ripped 6.48% higher in the past week. That is exactly the kind of tape that turns the Direxion Daily TSLA Bull 2X Shares ETF into either a jackpot or a trap, depending on which day you bought.

The Direxion Daily TSLA Bull 2X Shares (NASDAQ:TSLL) is a single-stock leveraged fund that seeks to deliver twice the daily return of Tesla common stock. It has quietly become one of the largest single-stock leveraged ETFs in the country, with roughly $5.03 billion in net assets as of the fund’s latest April 30, 2026 NPORT filing. Leveraged single-stock funds barely existed four years ago; today they are one of the fastest-growing corners of the ETF market.

How the Amplification Actually Works Look inside the fund and you will find only a fraction of that $5 billion actually held in Tesla stock. TSLL’s most recent filing shows just 1,679,200 shares of Tesla, worth $640.8 million, or only 12.74% of net assets.

The rest of the exposure is engineered. The fund parks 110.80% of net assets in short-term cash vehicles spread across Goldman Sachs and Dreyfus money-market products, then layers on a stack of seven derivative positions worth negative $1.21 billion, or roughly negative 24.16% of net assets. Those swaps are what get the fund to its 2x daily target. When Tesla ticks up 1%, TSLL is designed to tick up 2% that same day. When Tesla falls 1%, TSLL is designed to fall 2%.

The Ride in 2026, in Dollars Tesla’s chart this year has been a study in violence. The stock opened 2026 at $449.72, then slid to $327.35 by August 4. Over the last month alone, Tesla is down 16.8%, and it is off 22.02% since July 6.

Now apply the daily doubler. A trader who nailed the last week caught Tesla’s 6.48% pop at roughly double the pace in TSLL. A trader who bought TSLL on July 6 rode Tesla’s 22.02% drop into a hole considerably deeper than that, because 2x leverage combined with daily rebalancing tends to overshoot the headline multiple during volatile drawdowns. That is volatility decay: hold a leveraged fund through a choppy stretch and the math of compounding daily resets can chew up capital even if the underlying eventually goes nowhere.

What the Crowd Is Betting Now Polymarket traders are pricing a tight range for Tesla in August. The largest active market assigns a 0.793 probability that Tesla trades at $330 in August, a 0.6 probability for $345, and a 0.375 probability for $360. Downside conviction is meaningful too, with a 0.52 probability of a $300 print.

Sentiment has been improving on the margin. The composite score sits at a neutral 50.53, but the 30-day trend change is +9.32. Options positioning leans bullish in the short term, with Tesla’s full-chain put/call ratio at 0.5. That is the kind of setup that draws leveraged-ETF traders in: a stock with a wide price cone and improving sentiment, where a 2x wrapper turns small daily moves into memorable ones.

The Turn: What Leverage Costs When You Are Wrong Direxion’s prospectus language on these products is blunt. The firm warns that leverage magnifies any tracking differences and that under stressed conditions a leveraged fund may fail to hit its objective, cut its leverage, or close entirely. In an illustrative example the issuer uses for a 2x fund, a hypothetical 20% decline in the underlying over 10 trading days produced a 36.32% decline in the leveraged fund, less than a straight doubling because of the path. In the other direction, the same daily-reset mechanics could produce a total loss in a single day if the underlying moves more than 50% against the fund.

Leveraged ETFs like TSLL are built to deliver their multiple over one trading day and are designed for short-term tactical trades. Hold them for weeks or months and your return can diverge sharply from twice Tesla’s return, in either direction.

What to Watch Next The near-term tell is whether Tesla can hold above $320. Prediction markets currently give it a 0.59 probability of closing above $320 for the week and a 0.47 probability of closing above $330. Analysts, for their part, carry a $398.30 average price target, split 23 Buy, 19 Hold, 6 Sell. Every dollar Tesla travels from here, TSLL is engineered to travel roughly two. Whichever way it goes, the fund will make sure holders feel it.

Contact [email protected] for any questions or corrections.

For all Tesla (TSLA +1.64%) has achieved, and it has achieved much over the past decade plus, it faces numerous near-term challenges. Global competition is only intensifying in the electric vehicle (EV) industry, its product lineup is aging despite still selling well, and price cuts have hindered profit margins. For investors still considering investing in Tesla long-term, there is another potential speed bump in the road ahead: the company's mounting litigation exposure.

Overlooked topic There was a recent development that many investors overlooked: Tesla has confidentially settled with three of five named plaintiffs in a racism lawsuit that has been on the company's radar for nearly a decade, since 2017. In the grand scheme of that lawsuit, it doesn't change a whole lot, and there are still nearly 600 workers involved with serious allegations. Investors can't forget that California's civil rights agency has its own case, too.

Image source: Tesla.

Tesla is currently battling more than 20 active litigation fronts, ranging from wrongful death suits to false advertising about full self-driving (FSD) to the previously mentioned racial discrimination case. Part of the reason Tesla's mounting legal exposure is often overlooked, in my opinion, is that there's significant uncertainty in how these lawsuits will play out and how much they could cost the company.

Today's Change

(

1.64

%) $

5.27

Current Price

$

327.35

That said, the folks over at Electrek did an excellent job breaking it all down, and the numbers are a little alarming. When accounting for all potential costs, Tesla's litigation exposure ranges from about $2.7 billion to $14.5 billion. Another potential reason this gets overlooked is that it's not easy to see in the company's financials. Tesla doesn't break out a separate "legal reserve" line item, and it only has to set aside specific financial reserves for lawsuits if a loss is both probable and reasonably estimable.

What it all means Throughout history, there have been numerous examples of massive lawsuits bankrupting companies, but investors don't have to worry about that. Let's hypothetically say Tesla loses a handful of large lawsuits and is forced to pay out: It turns into an action that directly lowers operating income. Consider that Tesla reported operating income of $1.34 billion for the first half of 2026, and then consider even materializing over a number of years at the low end of Tesla's litigation exposure, the exposure could be a drag on earnings.

Ultimately, Tesla's liquidity is over $40 billion, and even in a highly unlikely worst-case scenario, it could absorb these payouts without any real concern for its ongoing operations. That said, Tesla's litigation woes and concerns are likely to grow, and investors need to keep its legal issues in mind when assessing uncertainty, risk, and potential long-term earnings drags.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Image Credits:Nic Coury/Bloomberg / Getty Images 2:07 PM PDT · August 4, 2026

SpaceX has ramped up purchases of Tesla Megapack, spending $295 million on the battery storage devices in the second quarter and $329 million so far this year, according to the company’s earnings report released on Tuesday.

The purchase illustrates just how interconnected Elon Musk’s universe of companies are. Musk, who is the CEO and largest shareholder of SpaceX, also runs Tesla. Musk’s artificial intelligence business xAI acquired his social media platform, X, in 2025. Earlier this year, SpaceX gobbled up xAI.

The industrial-scale batteries are likely being deployed at the company’s xAI data centers. Before xAI merged with SpaceX, the AI company bought $430 million worth of Megapacks for its data centers. In the first quarter of this year, xAI had purchased only $34 million worth of the equipment. SpaceX also reported that as of December 2025, it had acquired $131 million worth of Tesla Cybertrucks at manufacturer’s suggested retail price, according to its regulatory filing.

Though xAI has leaned heavily on natural gas to power its data centers — including dozens of unpermitted turbines at a site in Mississippi not far from the Colossus data center project — large batteries like the Megapack are still a critical part of data centers. 

In addition to providing substantial backup power that can be tapped in a second or less, batteries can provide extra power to GPUs when they demand it. AI data centers don’t draw power consistently. Rather, their power demand ramps up and down depending on the demands of training AI models and running inference.

Such peaks can incur significant charges from a local utility or overwhelm on-site generators. Batteries help smooth out those peaks, lowering costs while ensuring that the data center can operate consistently.

Topics

When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.

Tim De Chant is a senior climate reporter at TechCrunch. He has written for a wide range of publications, including Wired magazine, the Chicago Tribune, Ars Technica, The Wire China, and NOVA Next, where he was founding editor.

De Chant is also a lecturer in MIT’s Graduate Program in Science Writing, and he was awarded a Knight Science Journalism Fellowship at MIT in 2018, during which time he studied climate technologies and explored new business models for journalism. He received his PhD in environmental science, policy, and management from the University of California, Berkeley, and his BA degree in environmental studies, English, and biology from St. Olaf College.

You can contact or verify outreach from Tim by emailing [email protected].

Elon Musk wants Wall St. to look at Tesla (NASDAQ: TSLA | TSLA Price Prediction) as a robotics and AI company. Its Cybercab robotaxi runs on advanced-level AI, so passengers don’t have to rely on drivers at all. Its mainstream cars will eventually have similar capabilities. However, it is in a race with products like Google Waymo. Its Optimus robot is supposed to be so advanced that Elon Musk says there will eventually be an army of them around the world. But one analysis shows it has at least 11 rivals. Lost in the hype is the fact that Tesla is nothing more than a car company today, based on its financial importance.

Tesla finds itself in a boat with a number of other EV companies, in particular, several large ones based in China. The largest of these, BYD, is making inroads in Southeast Asia, South America, and more recently, Europe. In the first half of this year, according to the European Automobile Manufacturers’ Association (ACEA), BYD registrations in the EU were 130,743, up 168%. Tesla’s comparable number was 124,242, up 75%.

The blockage of the Strait of Hormuz may be the best thing that has happened to Tesla in years. Patrick De Haan, head of petroleum analysis at GasBuddy, recently said that, despite a slight drop in oil prices, “By later this week, the national average could reach its highest level ever recorded for this point in the calendar year.” That means about $4.10 for a gallon of regular, on average, nationwide.

Used Teslas are posting extremely strong sales and high transaction prices. iSeeCars reported that EV prices rose 7.2% year over year in June, based on data from over 1.8 million 1- to 5-year-old used cars sold in June 2025 and 2026. Across this universe, Tesla was the big winner. Its Model X had the largest increase in price at 17.5%. Its Model 3 ranked 5th with an increase of 13.5%. Its Model S ranked 7th with an increase of 13.1%.

Tesla’s challenge is whether its new car sales can have a significant pickup. The numbers it posted in the second quarter were not bad. Model 3 and Model Y production increased 12% to 442,936. Deliveries of the same models rose 25% to 467,762. The proof that Tesla is an EV company is that EV revenue was 72% of the total of $28.2 billion.

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.

Cox Automotive reported that 50.2% of EVs sold in the second quarter were Teslas. The balance of the market is fractured. No other company had more than 6%.

There is ample evidence that high gas prices increase the interest in EVs. According to Yahoo, “Surging gas prices have more than half of car buyers eyeing EVs and hybrids.”

Tesla’s stock price is down 30% this year while the S&P 500 is up 8%. EV sales may do more than AI and robotics to reverse that slide.

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.

Contact [email protected] for any questions or corrections.

Elon Musk wants you to believe Tesla is no longer a car company, even if it’s still shaped like one. The company shipped nearly half a million cars last quarter and made 70% of its money from car sales.

Still, Musk has spent the last few years making the case that Tesla is really an AI and robotics company, even if some of the AI happens to live in cars. And whatever the company financials suggest, Musk’s attention has been moving decisively to the AI parts of the company — projects like the Optimus robot and fully autonomous robotaxis— as the everyday concerns of a carmaker get pushed to the side. 

To show how that shift happened, TechCrunch teamed up with Hudson Labs, a New York-based financial research firm, to map what Musk and Tesla’s other executives have spent the last seven years talking about on the company’s quarterly earnings calls.  

The startup sourced transcripts of the calls from S&P Market Intelligence dating back to 2019 and used its Co-Analyst — an AI tool purpose-built for high-precision financial research — to determine a topic for each sentence, before counting their frequency. 

The data shows that Musk now speaks about artificial intelligence, along with robotaxis and Full Self-Driving software, nearly 50% of the time he opens his mouth. That’s up from prior years, like in 2022, when he typically spent 15%-20% of the time on those efforts. 

Over the same period, Musk was often making the case that autonomy justified the company’s soaring value.  

“If you value Tesla as just an auto company – fundamentally, it’s the wrong framework,” Musk said on the Q1 call in 2024. “If somebody doesn’t believe Tesla is going to solve autonomy, I think they should not be an investor in the company.” 

Talk of robotics has shot up sharply in the last three years, too.  

Tesla revealed it was working on a humanoid robot known as Optimus in 2021. In the year that followed, Musk only spent around two percent or less of his time talking about the project. Over the past year, though, he’s spent at least 10% of his remarks talking up Optimus, with it occupying nearly a third of his focus on the third-quarter call in 2025. 

Musk ramped up how often he talks about these futuristic ideas at the same time that Tesla’s core automotive business stopped growing. As a result, he now spends less than a third of his time on earnings calls talking about cars and manufacturing. On that same third-quarter call last year, Musk spent less than 20% of his time talking about the automotive business.  

The other Tesla executives who appear on the company’s earnings calls, like chief financial officer Vaibhav Taneja and vice president of engineering Lars Moravy, have been much slower to shift their focus. Even on some of the most recent calls, they have spent around 30% of the time focusing on the automotive business, with their next-most common topics being AI, robotaxi, and Full Self-Driving. 

Their attention has shifted, but they are lagging behind Musk’s enthusiasm for AI and robotics, most likely because those efforts aren’t yet generating any real returns.  

These other Tesla executives used to spend nearly 50% of their time on these calls (or more) talking about making and selling cars. That all changed in 2024 as the car business started to suffer thanks to increased competition from legacy automakers and new Chinese entrants. 

But when they do join Musk in talking up the future, they match the lofty rhetoric of their boss, the world’s richest man.  

“The path to amazing abundance is ever challenging and requires making bold bets,” Taneja said on the Q2 call this year. “Our progress will be non-linear. The future is going to be great.” 

When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.

Sean O’Kane is a reporter who has spent a decade covering the rapidly-evolving business and technology of the transportation industry, including Tesla and the many startups chasing Elon Musk. Most recently, he was a reporter at Bloomberg News where he helped break stories about some of the most notorious EV SPAC flops. He previously worked at The Verge, where he also covered consumer technology, hosted many short- and long-form videos, performed product and editorial photography, and once nearly passed out in a Red Bull Air Race plane.

You can contact or verify outreach from Sean by emailing [email protected] or via encrypted message at okane.01 on Signal.

Russell Brandom has been covering the tech industry since 2012, with a focus on platform policy and emerging technologies. He previously worked at The Verge and Rest of World, and has written for Wired, The Awl and MIT’s Technology Review. He can be reached at [email protected] or on Signal at 412-401-5489.

There's no denying Tesla (TSLA +3.49%) is one of the market's most exciting growth companies right now. But, currently priced at 140 times next year's expected earnings of $2.23 per share, there's also no denying Tesla stock is outrageously expensive. For perspective on that figure, the S&P 500's forward-looking price-to-earnings (P/E) ratio right now is only 21.

Today's Change

(

3.49

%) $

10.87

Current Price

$

322.08

Sure, plenty of stocks have been rightfully valued at sky-high levels like this in the past. Think Amazon, or Cisco back in the 1990s. These outfits were positioned to capitalize on the internet's then-budding explosion. Investors were willing to pay a steep price because future growth was likely to be strong enough to justify the premium.

This doesn't hold true every time, though. Sometimes, the assumptions of future growth driving wildly high P/E ratios end up being just plain wrong. Businesses such as Groupon, GoPro, and meal-kit company Blue Apron come to mind. Only in retrospect did the flaws in these companies' business models become evident.

So what must Tesla get right in the foreseeable future to justify its stock's rich valuation right now? Here are the top five things the company must do to justify its stock's present price, but one in particular is a huge must-do.

1. It must lead an EV market that eventually displaces combustion-engine cars Tesla technically isn't the leader of the world's electric-vehicle business anymore. That honor belongs to China's BYD (BYDDY +1.09%), which delivered 557,090 battery-electric vehicles last quarter, versus Tesla's 480,126. But there's arguably room for two (or more) titans in the EV business. Tesla just needs to make sure it's one of them.

Perhaps the more important factor here, rather, is electric vehicles' continued penetration of the global automobile market itself. This is still happening, too; the International Energy Administration reports that worldwide EV sales topped 20 million last year -- about one out of every four cars purchased in 2025, up 20% from 2024's count. But headwinds appear to be blowing. BloombergNEF predicts that global EV demand will only grow 11% year over year to 23 million passenger vehicles in 2026, with most of the demand coming from China, where Tesla is increasingly uncompetitive. Meanwhile, although the U.S. remains Tesla's biggest market, this market isn't growing. Tesla's second-quarter U.S. sales fell 20% year over year to only 114,629 vehicles, according to numbers from Cox Automotive.

Something's got to change with either or both of these trajectories.

2. Lots of Tesla owners must subscribe to full self-driving features Tesla's vehicles come with a range of safety-minded driver assistance features. What many non-Tesla owners might not fully appreciate, however, is that the full self-driving features you hear so much about aren't free. They're now only offered on a subscription basis, at a cost of $99 per month. That's not a fortune, but it's certainly enough of an added cost that many owners might balk at the price.

And most of them have balked. Only about 1.5 million (roughly 15%) of all Tesla owners are currently paying this monthly fee, although to its credit, the company added a record-breaking 200,000 full-self-driving subscribers last quarter alone. That doesn't translate into a ton of revenue yet. It could someday, though, and this is very high-margin revenue.

For reference, a key component of Chief Executive Officer Elon Musk's trillion-dollar compensation package calls for a minimum of 10 million full-self-driving subscribers.

3. Robotaxis must work and gain wide adoption Speaking of self-driving cars, although its growth has been uneven and the underlying technology remains far from perfect, Tesla continues cultivating its robotaxi business, adding Orlando and Tampa, Florida, to its served markets just last month, and bringing its total markets up to seven. That's not nearly as much presence as Musk intimated would be the case when he first unveiled Tesla's new venture back in 2024.

Image source: Tesla.

That could change. Goldman Sachs predicts the worldwide robotaxi market could be worth more than $400 billion by 2035. Even winning a fraction of this business would be a boon for Tesla.

But it's miles away from capturing even a respectable fraction of the current and future robotaxi market.

4. Tesla's clean-energy arm must become a significant profit center Ironically, perhaps one of Tesla's biggest and best opportunities is also currently one of its smallest and least-discussed businesses. That's its solar panels (and solar roofs) and corresponding battery storage. Last quarter's energy revenue of $3.1 billion only accounted for about a tenth of Tesla's total Q2 top line.

The money is there to be made, though. Market research outfit Technavio says the U.S. residential solar market is poised to grow at an average annualized pace of more than 13% through 2030, when it will be worth more than $30 billion, although this outlook still arguably only scratches the surface of what's possible in the long run. Wood Mackenzie believes more than 70 million homes in the U.S. could conceivably install solar panels within the next 25 years.

5. Its AI robot, Optimus, must live up to Elon Musk's hype Last but hardly least, Tesla's artificial intelligence (AI)-controlled humanoid robot, Optimus, must be a smashing success to justify Tesla shares' forward P/E of 140.

This is the biggie. Indeed, it wouldn't be unreasonable to suggest that Tesla is now an AI robot company that also happens to manufacture electric vehicles and solar panels. Musk's certainly painted that picture anyway, suggesting more than once that Optimus will be "the biggest product ever, of any kind." That sort of rhetoric dramatically builds lofty expectations.

And to be fair, it might be possible. Although it's a long-term outlook, Morgan Stanley predicts the number of humanoid robots on the planet could reach 1 billion by 2050, translating into a $5 trillion market opportunity. However. as Morgan Stanley's head of global autos and shared mobility research, Adam Jonas, adds, "Adoption should be relatively slow until the mid-2030s, accelerating in the late 2030s and 2040s."

There's the rub for current and prospective Tesla shareholders. The market might support a premium valuation based on Musk's originally suggested commercial launch of Optimus sometime in 2027. If it takes much longer than that for Optimus to become a meaningful, profitable business, though -- giving competitors time to catch up -- investors may dial back their bullishness.

Tesla's electric vehicle business in China looms as a key hurdle to a potential merger between Elon Musk's automaker and SpaceX because of complications it could pose ​for the space firm's business with the U.S. government.

Tesla (TSLA +3.49%) stock declined notably after its recent second-quarter earnings. While the sell-off is understandable, I think long-term investors may be missing one key robotaxi development that strengthens the case for the stock. Here it is.

A reset of expectations on robotaxi The decline in the stock came down to a pincer-like movement on gross and operating margins caused by rising costs, including raw material costs and increased costs of providing financing, and increased research and development in connection with robotaxi and Optimus.

Today's Change

(

3.49

%) $

10.87

Current Price

$

322.08

At the same time, revenue expectations from the robotaxi rollout have been pushed out because Tesla isn't meeting the expectations previously laid out by CEO Elon Musk in terms of the scale of the rollout. Management's commentary on the rollout during the earnings call also dampened the enthusiasm of some investors over a massive scaling in 2026

That said, it's possible that the selling reflected a reset of expectations on robotaxi. Once the more exuberant notions of a sudden scaling have exited investors' thinking, the stock is likely to appreciate on any positive development on robotaxi.

Why the latest version of full self-driving software matters The good news is that Tesla is making progress. To understand why, you have to go back to the last earnings call in April, when Musk outlined that "it wouldn't be right for us to go to like very large scale unsupervised FSD when we know that there are software improvements in the pipeline." Those improvements are coming with the next version of full self-driving (FSD) software, namely v15.

Image source: The Motley Fool.

As such, it's clear that Tesla, in Musk's words, needs to "finish writing that software, validate it and release it before going to large-scale unsupervised FSD." In other words, no v15 equals no large-scale robotaxi rollout, and given that Musk believes v15 will be released in late 2026 or early 2027, it's unrealistic to expect massive scaling until then.

Tesla is making progress on robotaxi Fast-forward to the recent earnings call, and Tesla's vice president of AI, Ashok Elluswamy, told investors that "The currently operating robotaxi fleet is already running early versions of the v15 FSD software." This is a key point. Tesla is actively operating and testing an early version of its final solution for robotaxi FSD.

Moreover, Elluswamy noted that Tesla had "seven major improvement tracks" for v15, all developed in parallel, which have "40% of those tracks merged together, and that's what's running in the fleet right now."

He also noted that unsupervised robotaxi had notched up 380,000 miles without any notable incidents and was growing this figure at a double-digit rate every week.

Image source: Tesla.

What it means for investors Tesla is taking a safety-first approach to the rollout and making real progress on v15 FSD, such that when all the pieces are in place and v15 is released, and Tesla sorts out the operational issues around robotaxi, the rollout can scale. The kind of overnight robotaxi rollout that many investors expect is unlikely to occur in 2026; more likely in 2027.

As such, in 2026, investors should look out for more updates on v15, ongoing demonstration of safety with robotaxi, regulatory progress with Cybercab, FSD take-up rates, and approvals in Europe, rather than worrying too much over X or Y cars in the robotaxi fleet by date A or date B.

Tesla stock TSLA rose on Monday, extending its recovery from a sharp post-earnings selloff.

The stock gained about 3% to $321.65 in midday trading, putting it on track for a third consecutive daily advance.

The broader market also moved higher, with the S&P 500 rising 1% and the Dow Jones Industrial Average adding 1.2%.

The gains followed a difficult period for Tesla shares, which fell more than 20% after the company reported weaker-than-expected second-quarter results on July 22.

The stock closed below $300 for the first time in more than a year last week after a six-session losing streak.

Tesla reported operating profit of about $400 million for the quarter, roughly $1.3 billion below Wall Street expectations, while providing limited new details on its artificial intelligence initiatives, including robotaxis and the Optimus humanoid robot.

Tesla's July registrations across Europe were mixed, according to data released on Monday.

Vehicle registrations rose 86% year over year in France and 52% in Denmark, according to French automotive body PFA and Denmark's bilstatistik.dk.

However, registrations declined in Norway, Sweden, and Spain.

Tesla's European sales have rebounded in 2026 after two consecutive annual declines, supported by easier year-over-year comparisons, higher fuel prices, government incentives, and stronger consumer demand for electric vehicles.

Investor sentiment was little changed after the National Highway Traffic Safety Administration said on Friday that it had opened a preliminary investigation into about 1.2 million Tesla vehicles over reports of suspension failures.

The agency said its Office of Defects Investigation had received 156 complaints alleging that the front lower lateral link detached on certain 2018-2020 Model 3 and 2021-2023 Model Y vehicles, potentially causing a loss of steering control.

According to the agency, the reported failures could leave vehicles undrivable and require towing.

Most complaints indicated there was no advance warning before the failure, although some owners reported hearing noises beforehand.

The regulator said it was not aware of any crashes, injuries, or fatalities linked to the reported issue.

The investigation represents the first stage of the agency's defect review process and could ultimately lead to a recall if a safety-related defect is identified.

Stifel remains bullishDespite those near-term regulatory concerns, several Wall Street firms continue to focus primarily on Tesla's longer-term AI strategy.

Following Tesla's second-quarter results, Stifel lowered its price target on the stock to $491 from $508 while maintaining a Buy rating.

The brokerage said Tesla continues to make progress in Full Self-Driving and robotaxi development, which it views as the company's primary long-term value drivers.

Stifel also cited Tesla's largest order backlog since 2023 and the launch of the Model YL as signs that vehicle demand is improving.

The firm said its valuation is based on a sum-of-the-parts analysis and identified adoption of Full Self-Driving technology and the commercial success of robotaxis as the biggest factors that could influence its investment thesis.

Posted by Defense World Staff on Aug 3rd, 2026

FAS Wealth Partners Inc. boosted its holdings in shares of Tesla, Inc. (NASDAQ:TSLA – Free Report) by 43.6% during the first quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The institutional investor owned 19,987 shares of the electric vehicle producer’s stock after buying an additional 6,073 shares during the quarter. FAS Wealth Partners Inc.’s holdings in Tesla were worth $7,430,000 as of its most recent SEC filing.

Several other hedge funds and other institutional investors also recently added to or reduced their stakes in TSLA. Vanguard Group Inc. raised its stake in shares of Tesla by 2.6% in the fourth quarter. Vanguard Group Inc. now owns 258,925,024 shares of the electric vehicle producer’s stock valued at $116,443,762,000 after acquiring an additional 6,538,720 shares in the last quarter. State Street Corp boosted its holdings in Tesla by 0.9% in the fourth quarter. State Street Corp now owns 114,842,934 shares of the electric vehicle producer’s stock valued at $51,647,164,000 after purchasing an additional 1,080,085 shares during the period. Geode Capital Management LLC grew its stake in Tesla by 0.6% during the 4th quarter. Geode Capital Management LLC now owns 65,700,975 shares of the electric vehicle producer’s stock worth $29,426,070,000 after purchasing an additional 375,946 shares in the last quarter. Norges Bank purchased a new stake in Tesla during the 4th quarter worth about $17,128,100,000. Finally, Amundi raised its position in Tesla by 14.0% in the 1st quarter. Amundi now owns 22,174,884 shares of the electric vehicle producer’s stock valued at $8,243,513,000 after purchasing an additional 2,727,141 shares in the last quarter. Hedge funds and other institutional investors own 66.20% of the company’s stock.

Tesla Stock Down 0.0% TSLA stock opened at $311.20 on Monday. The company has a fifty day moving average price of $389.93 and a 200 day moving average price of $397.55. Tesla, Inc. has a 12 month low of $297.38 and a 12 month high of $498.83. The company has a market cap of $1.23 trillion, a price-to-earnings ratio of 288.15, a price-to-earnings-growth ratio of 15.44 and a beta of 1.83. The company has a debt-to-equity ratio of 0.09, a current ratio of 1.94 and a quick ratio of 1.55.

Tesla (NASDAQ:TSLA – Get Free Report) last released its quarterly earnings results on Wednesday, July 22nd. The electric vehicle producer reported $0.33 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.50 by ($0.17). Tesla had a return on equity of 3.82% and a net margin of 3.67%.The company had revenue of $28.24 billion for the quarter, compared to analysts’ expectations of $26.42 billion. During the same period in the prior year, the business earned $0.33 EPS. The business’s quarterly revenue was up 25.5% compared to the same quarter last year. Sell-side analysts expect that Tesla, Inc. will post 0.89 earnings per share for the current year.

Analyst Upgrades and Downgrades Several equities analysts have recently issued reports on the company. Mizuho set a $450.00 price objective on Tesla and gave the company an “outperform” rating in a research note on Thursday, July 23rd. BTIG Research lowered shares of Tesla to a “neutral” rating in a research note on Friday, June 5th. JPMorgan Chase & Co. reduced their target price on shares of Tesla from $475.00 to $445.00 and set a “neutral” rating on the stock in a report on Thursday, July 23rd. William Blair reiterated a “market perform” rating on shares of Tesla in a report on Thursday, July 2nd. Finally, TD Cowen reissued a “buy” rating and issued a $460.00 price objective (down from $490.00) on shares of Tesla in a research report on Thursday, July 23rd. One equities research analyst has rated the stock with a Strong Buy rating, twenty-one have assigned a Buy rating, nineteen have issued a Hold rating and four have assigned a Sell rating to the stock. Based on data from MarketBeat.com, Tesla has a consensus rating of “Hold” and a consensus target price of $402.24.

Read Our Latest Report on Tesla

Insider Transactions at Tesla In other Tesla news, CFO Vaibhav Taneja sold 3,000 shares of the company’s stock in a transaction on Wednesday, May 13th. The shares were sold at an average price of $450.00, for a total transaction of $1,350,000.00. Following the completion of the transaction, the chief financial officer owned 18,106 shares in the company, valued at approximately $8,147,700. This represents a 14.21% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Corporate insiders own 19.90% of the company’s stock.

Tesla News Summary Here are the key news stories impacting Tesla this week:

Positive Sentiment: Reports that Tesla could separate or sell its China operations to facilitate a potential merger with SpaceX have fueled speculation that investors could gain exposure to a broader artificial-intelligence, robotics and space conglomerate. Elon Musk called the China-sale report “fake news,” however, making the potential transaction highly uncertain. Tesla reportedly might sell its China business ahead of a SpaceX merger Positive Sentiment: Tesla’s production of its 10 millionth electric vehicle provides a notable scale milestone and reinforces its long-term manufacturing credentials. Rising global EV demand and higher gasoline prices could also support industry growth. Tesla made its 10 millionth EV Positive Sentiment: A broad technology rally, stronger results from Microsoft and Amazon, and an oversold condition helped improve sentiment toward Tesla after its post-earnings selloff. Reports also cited encouraging European safety data for supervised Full Self-Driving. Why is Tesla stock rising Neutral Sentiment: Speculation about Tesla and SpaceX merging remains a major valuation catalyst, but no deal has been confirmed. A transaction could expand Tesla’s AI and autonomy narrative while also creating substantial regulatory, geopolitical and execution complexities. A Tesla/SpaceX merger may be on the horizon Negative Sentiment: The National Highway Traffic Safety Administration opened a preliminary investigation into approximately 1.2 million Tesla vehicles over reported suspension failures that could cause loss of steering control. Potential recalls, repair costs and additional scrutiny pose risks. US auto safety regulator probes Tesla vehicles Negative Sentiment: Investors continue to question Tesla’s robotaxi outlook after Elon Musk missed several previously announced timelines. Delays weaken the near-term case for the company’s exceptionally high valuation and increase pressure on the core EV business. Elon Musk has missed his own robotaxi timelines Negative Sentiment: Tesla’s latest quarter showed an EPS miss, sharply lower margins and negative cash flow while capital spending on AI and autonomy is rising. The combination of weaker current earnings and heavy investment is making investors less tolerant of execution setbacks. Tesla after a rough quarter About Tesla (Free Report)

Tesla, Inc (NASDAQ: TSLA) is an American company that designs, manufactures and sells electric vehicles, energy generation and energy storage products. Founded in 2003 by Martin Eberhard and Marc Tarpenning, Tesla grew into a vertically integrated mobility and clean‑energy company with Elon Musk serving as its chief executive officer. The company’s stated mission is to accelerate the world’s transition to sustainable energy, reflected in its combined focus on electric drivetrains, battery technology, renewable energy products and software.

Tesla’s automotive business includes a lineup of battery‑electric vehicles and related services.

Further Reading Five stocks we like better than Tesla 3 Fixed-Income ETFs Show Why Yield Is Only Part of the Income Story AbbVie Quietly Solved Its Biggest Problem—Now What? Rio Tinto’s Results Make the Case for Looking Beyond Tech in the AI Trade Strategy’s Structural Strength: Hidden in a $8 Billion Illusion Want to see what other hedge funds are holding TSLA? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Tesla, Inc. (NASDAQ:TSLA – Free Report).

Receive News & Ratings for Tesla Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Tesla and related companies with MarketBeat.com's FREE daily email newsletter.

« PREVIOUS HEADLINECurry Webb Wealth Management LLC Takes Position in Vanguard S&P 500 Growth ETF $VOOG

NEXT HEADLINE »FAS Wealth Partners Inc. Has $6.78 Million Stake in Vanguard Total World Stock ETF $VT

The headline number in BYD's July sales, announced over the weekend, is not the one that should worry Tesla.

BYD, the Chinese carmaker that overtook Tesla Inc (NASDAQ:TSLA) as the world's largest seller of battery-electric vehicles last year, lifted global sales 21.8% to 419,211 vehicles, a third straight month of growth.

The figure that matters to Elon Musk's company sits underneath it. Overseas shipments of passenger vehicles and pickups jumped 124.3% to 179,841 units, meaning exports, not the Chinese home market, are now driving BYD's expansion.

That distinction is the whole story, because exports are precisely where BYD and Tesla collide.

A fight on Tesla's turf

BYD sells almost nothing in the United States, where Chinese cars are effectively barred, so its export drive is aimed at Europe and other international markets.

Those are the same markets where Tesla has been bleeding share, with its sales in Europe and China eroded by the rise of Chinese rivals over the past two years.

Tesla's global appeal has long rested on its geographic spread, the argument that it is less exposed than BYD to any single country's policies.

BYD is now systematically dismantling that advantage by building factories in Hungary, Turkey and Thailand and raising its overseas sales target for the year.

Every European buyer BYD wins is a buyer Tesla is increasingly unlikely to reach, and the July numbers show the pipeline filling fast.

Why BYD is pushing so hard abroad

The export blitz is not simply ambition; it is compensation. BYD's domestic sales have softened after China scrapped the tax exemption that once made new electric cars cheaper, cooling the market it dominates.

Rather than accept flat volumes, BYD has redirected capacity outward, using technology showcases such as its high-power flash charging demonstrations to build credibility in new markets before scaling up.

The result is a company that has turned a home-market wobble into an international offensive, and the offensive is landing.

For Tesla, a rival forced abroad by domestic pressure is more dangerous than a complacent one, because it arrives hungry and heavily supplied.

Tesla's shrinking core

The timing is awkward for a company whose car business is already under strain.

Tesla's annual deliveries fell around 9% in 2025, a second consecutive yearly decline, and it lost the global electric-vehicle crown to BYD in the process.

The two now trade the quarterly lead, with Tesla reclaiming it early in 2026 only because BYD stumbled at home, before BYD surged back ahead in the second quarter by more than 70,000 vehicles.

BYD's export recovery threatens to make that lead permanent rather than seasonal.

The deeper problem is that Tesla's response to a maturing car market has been to look away from it.

Musk has pivoted the company's story towards artificial intelligence, robotaxis and humanoid robots, pitching Tesla as a technology firm rather than a carmaker.

That narrative has propped up the share price, but it does nothing to defend the European and international volumes that BYD is now hunting.

The squeeze

What BYD's July figures really expose is a divergence in direction. BYD is doubling down on the business of building and selling cars faster and cheaper across more countries, while Tesla is quietly retreating from that contest towards an autonomous future it has yet to deliver.

If robotaxis arrive on schedule and at scale, Tesla's inattention to raw volume may look visionary.

If they do not, the company will have surrendered the export markets that fund everything else to a competitor that never stopped fighting for them.

For now, the message from BYD's numbers is blunt: the global car war is being fought hardest in exactly the places Tesla has chosen to defend least.

 As Tesla Inc. (NASDAQ: TSLA) stock fell by more than 25% in July 2026 due to second-quarter earnings that missed analysts’ expectations, Stephen Gengaro, a Wall Street expert at Stifel Nicolaus, signaled a cautiously positive outlook for the company’s shares over the next 12 months. 

Gengaro maintained a Buy rating for Tesla stock, according to a note Finbold analyzed on August 3. He, however, cut the firm’s 12-month price target to $491 from $508, representing a reduction of 3.35%. With TSLA shares trading at $311.21 at press time, this analyst signals a potential 57.77% upside.

“Cautiously positive – Stifel maintains Buy on progress in FSD, Robotaxi and demand, while cutting its target after margin and EBITDA weakness,” Gengaro argued.

The analyst highlighted that Tesla posted record deliveries of 480,126 and a revenue beat, as per its second-quarter 2026 report. However, Gengaro lowered the 12-month target for TSLA price due to the company’s stalled gross profit and adjusted EBITDA of $3.27 billion, which missed consensus.

Most importantly, the firm believes that Tesla is making strong progress on Full Self-Driving (FSD) and Robotaxi. With the company’s launch of Model YL, Gengaro expects a demand resurgence, bolstered by Tesla’s largest order backlog since 2023.

Tesla stock price forecast 2026  Although Tesla stock price has plunged by more than 30% year-to-date (YTD), trading at $311.21 at the time of reporting, Wall Street analysts forecast a potential rebound. Furthermore, Tesla stock recorded more sell-off in July as the mixed quarterly earnings report weighed down on expectations.

TSLA stock YTD chart. Source: Finbold Notably, 28 analysts surveyed by TipRanks have set an average 12-month price target of $382.65, signaling a likelihood of a near 23% upside. Consequently, the average Hold rating for Tesla stock shows that Wall Street is not anticipating a fresh bull rally over the coming 12 months.

The latest earnings report from Tesla (TSLA +0.76%) wasn't pretty. The company missed Wall Street's expectations by roughly 38%, operating profit fell to about $400 million from $923 million a year earlier, and free cash flow swung to negative $1.1 billion as capital spending surged. Not surprisingly, the stock sold off sharply. Yet CEO Elon Musk sounded remarkably unconcerned.

Instead of focusing on weak quarterly results, Musk emphasized what Tesla is building: autonomous driving, robotaxis, Optimus humanoid robots, and the AI infrastructure needed to support those businesses. Management is intentionally spending heavily today because it believes those investments could create substantially larger revenue streams over the next decade. So the question is: Is that confidence justified?

Musk's view The automotive business is clearly under pressure. Vehicle pricing remains competitive, regulatory credit sales have declined, and margins continue to face pressure. Tesla's automotive gross margin fell to roughly 16.3% during Q2, well below the levels investors became accustomed to just a few years ago. Meanwhile, the company continues spending billions on AI infrastructure, compute capacity, factories, and robotics, helping drive free cash flow to negative $1.1 billion during the second quarter.

If Tesla were simply an electric vehicle manufacturer, those trends would be concerning enough to justify a much lower valuation. But that's not how Musk wants investors to view the company.

Image source: Getty Images.

His argument is that today's earnings tell investors very little about Tesla's long-term value because the company's biggest opportunities haven't yet begun contributing meaningful profits. Robotaxis remain in the early stages of deployment, Optimus is still under development, and Tesla continues investing aggressively in AI training infrastructure that management believes will support both businesses.

Big promises Of course, that doesn't mean investors should simply ignore the disappointing quarter. Tesla has a long history of making ambitious promises years before they become commercially meaningful. Some have eventually materialized. Others have taken much longer than originally projected. As a result, you should probably discount future projections until they begin showing up in measurable financial results.

Today's Change

(

0.76

%) $

2.36

Current Price

$

311.21

This is especially important because Tesla's valuation still depends heavily on businesses that remain largely unproven at scale. Wall Street appears increasingly unwilling to assign premium multiples based solely on future possibilities, which helps explain why the stock reacted so negatively despite Musk's optimistic tone.

That said, if you're long on Tesla, the investment thesis hasn't fundamentally changed. Tesla is no longer just about electric vehicle sales. It's increasingly a bet on whether the company can successfully commercialize autonomous transportation, robotics, and artificial intelligence before competitors catch up. And that makes quarterly earnings less important than actual execution.

Missing earnings by 38% certainly isn't good news. But if Musk ultimately delivers profitable autonomous driving and robotics businesses, this quarter will likely be remembered as little more than an expensive investment period. If those initiatives disappoint, however, the market may conclude that the automotive business alone isn't enough to justify Tesla's premium valuation.

The market wasn't pleased with Tesla's (TSLA +0.76%) Q2 2026 financial results (ended June 30). The business easily beat Wall Street's revenue estimates. However, its profit came in well below expectations, as operating expenses soared 47% year over year.

Since providing the financial update on July 22, this "Magnificent Seven" stock has fallen 20% (as of July 29). And it is no longer in the trillion-dollar club. Sentiment appears to be shifting.

Should you buy Tesla on the dip while it trades below $350 per share? The answer really depends on your level of optimism regarding autonomous driving and robotics.

Image source: The Motley Fool.

Tesla is spending big on an unknown future Tesla's financials have taken a turn for the worse. The company's spending has ramped up. Operating costs jumped in Q2, as mentioned. According to Tesla, this was driven partly by the company's "artificial intelligence and other research and development projects."

Capital expenditures are also up and projected to total more than $25 billion in 2026. And they will grow in the coming years.

Free cash flow (FCF) was negative $1.1 billion during the second quarter. The consensus view among sell-side analysts is that this figure will be $11.4 billion in the red in 2026.

Tesla's clear goal is to introduce AI to the real world, so it certainly believes the investments are worth it. The money is being directed to build AI infrastructure, expand Robotaxi (now providing unsupervised rides in six U.S. cities), and ramp up production of Optimus (planned to start later this year).

However, it's not unreasonable to believe that the potential financial payoff from advancements in autonomous driving and robotics is still far off. In the meantime, investors will have to be comfortable with the higher levels of spending and FCF pressure that come, paired with an uncertain outcome.

Today's Change

(

0.76

%) $

2.36

Current Price

$

311.21

Here's the math to generate a winning return Investors should never forget to analyze valuation when making decisions. The price-to-earnings (P/E) ratio, for instance, can reveal market sentiment.

For Tesla, the investment community still looks bullish, as shares trade at an astronomical P/E multiple of 280. The market treats Tesla like a story stock, with the narrative carrying significantly more weight than the business's reality.

Even if we assume Tesla's valuation gets cut in half in five years, the hypothetical P/E ratio of 140 would still be in nosebleed territory in July 2031. In this scenario, diluted earnings per share would need to grow by 300% for the stock price to double over the next five years. That's a high bar to clear.

There are plenty of Tesla bulls who have no issue with this math. I'll take the opposite view. The electric vehicle stock isn't a good buy at or below $350. This perspective can change if the company's profit starts to skyrocket.

Space Exploration Technologies (SPCX -3.41%) made history in June when it completed the largest IPO in history. It's been a wild ride for the space company since then. It opened at $150, meaningfully up from its IPO price of $135, and rose to as high as $225 in the following weeks. However, the stock has been mostly southbound recently, and at $109 as of writing, it is down 19% from its IPO price. Where will the stock go from here? Perhaps we can get a clue by looking at Tesla's (TSLA +0.76%) first year on the market. The other publicly traded corporation headed by Elon Musk bears some similarities to SpaceX. Let's dig in.

Image source: The Motley Fool.

Can SpaceX rebound like Tesla? SpaceX took on the challenge of revolutionizing space travel. It used to be extremely difficult and expensive due to the use of disposable rockets. The company pioneered reusable rockets and helped significantly reduce launch costs. Now, it is the largest player in the field and continues to innovate. SpaceX is also deeply vertically integrated, which helps the company control costs. Tesla similarly moved the electric vehicle (EV) market forward through its vertically integrated approach, innovative battery technology, and EVs that could perform just as well as gas-powered cars. Tesla went public on June 29, 2010, and about two months into its life as a publicly traded company, the stock had declined by 18%.

TSLA data by YCharts

However, Tesla rebounded and had a respectable first year on the market, gaining 18% by the end of it, partly because of the company's plans to go beyond its first car, the Roadster -- a sports vehicle -- and to move into the mass-market category with the Model S, which it introduced in 2012. Can SpaceX also rebound and perform well through its first year on the market?

Today's Change

(

0.76

%) $

2.36

Current Price

$

311.21

On the one hand, the space company is working on projects that should give investors confidence about the future. SpaceX's next-gen rocket, Starship, is fully reusable and can handle much bigger payloads than its current crown jewel, Falcon 9. That means lower per-launch costs, enabling the company to improve margins and profits. It will also help it launch far more satellites into orbit and expand its Starlink business, which provides internet connectivity via a network of satellites in Low Earth Orbit. Starship is still in testing and recently completed its 13th test flight.

Progress on this front could be a meaningful catalyst for SpaceX over the next year, potentially allowing the company to rebound and follow a trajectory similar to Tesla's post-IPO journey.

Today's Change

(

-3.41

%) $

-3.83

Current Price

$

108.37

However, the company has several things working against it. SpaceX is not consistently profitable. Also, its revenue isn't growing as fast as one might expect for a corporation worth $1.4 trillion, and with heavy investments in artificial intelligence, its bottom line could sink even further into the red. That's to say nothing of mounting competition. The market is still pricing SpaceX as a technology-disruption story without factoring in these and other risks. In my view, the stock will continue dropping over the next year. Will SpaceX be worth investing in then? That depends on how much it declines, and on whether it can make significant progress with Starship. The stock is definitely worth keeping an eye on, though, considering the vast opportunities it boasts across several highly lucrative industries.

Tesla (TSLA +0.76%) CEO Elon Musk has a long history of broken promises, so much so that there is an entire Wikipedia page dedicated to tracking his failed predictions.

In 2013, for example, Musk declared that Tesla "should be able to do 90% of miles driven [autonomously] within three years." That prediction was ultimately inaccurate.

In 2015, Musk doubled down by saying, "We're going to end up with complete autonomy, and I think we will have complete autonomy in approximately two years." Again, Musk's forecasts were too ambitious.

Fast-forward through the years, and you'll find many more failed predictions from Musk regarding Tesla's self-driving future.

"I mean, it does look like [full autonomy is] gonna happen this year," he said in 2023. "The acid test is, can you go to sleep in your car and wake up in your destination, and I'm confident that will be available in many cities in the U.S. by the end of this year," he said in 2025. Later that year, Musk declared that there would be "no safety driver by the end of the year" for Tesla's robotaxi service in Texas.

None of these predictions has come to pass. But here's the thing: Failed predictions shouldn't prevent you from buying into Tesla's autonomous driving narrative.

In fact, one key Tesla investor is buying large blocks of stock following recent weakness in the share price. Her investment thesis relies heavily on Tesla's robotaxi division despite Musk's repeated failed predictions.

Today's Change

(

0.76

%) $

2.36

Current Price

$

311.21

This Wall Street veteran is all-in on Tesla despite Musk's failed promises Since the start of 2026, Tesla's stock has fallen by roughly 30%. Most of that drop occurred recently following the company's latest earnings release. Cathie Wood -- the CEO of Ark Invest, a major Tesla shareholder -- has used the correction to add to her firm's stake. In all, Wood purchased 160,000 shares worth approximately $50 million following the post-earnings drop.

Image source: Tesla.

Wood's thesis is simple: Tesla is in the driver's seat to capture a huge share of the global robotaxi market, which she predicts will be worth between $8 trillion and $10 trillion over the long term. By 2030, Wood believes Tesla's stock price will reach $2,500, with the company's robotaxi division accounting for around 90% of that value.

In short, Wood is a huge believer in Tesla's robotaxi ambitions despite Musk's repeated inability to predict the scale and pace of its self-driving technology. Wood is right to be bullish. Tesla has an unparalleled ability to produce massive numbers of robotaxis internally for its fleet. And the company's artificial intelligence (AI) investments are scaling considerably. That should be a huge differentiator in achieving full autonomy and operating a robotaxi fleet with potentially millions of vehicles.

"We think $8 trillion to $10 trillion for the entire autonomous taxi opportunity throughout the world, from almost nothing," Wood predicted in 2025. Her bullishness was largely based on how rapidly AI is accelerating self-driving technology. "That's how quickly AI is going to cause these things to happen," she stressed.

Most of Musk's earlier predictions about Tesla's autonomous future didn't benefit as directly from rapid advances in AI. And while I won't necessarily trust his next prediction, AI is undeniably accelerating the pace and timeline of self-driving technologies. McKinsey & Co sees robotaxis reaching mass scale in many key markets by 2030. Tesla arguably has the pole position to compete heavily in that market.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

© 2023 Getty Images / Getty Images News via Getty Images

The Direxion Daily TSLA Bull 2X Shares ETF (NASDAQ:TSLL) promises to deliver twice Tesla’s daily returns, making it an appealing choice for investors looking to amplify gains in one of the market’s most volatile stocks. However, many investors overlook one critical detail: TSLL is built to track Tesla’s daily performance, not its long-term returns.

That distinction matters. Tesla has historically experienced enormous price swings, including multiple declines of 40% or more followed by powerful recoveries. While long-term Tesla shareholders have often been rewarded for staying invested, those same swings can work against leveraged ETFs because of their daily reset mechanism. Over weeks or months, TSLL can lose value even if Tesla (NASDAQ: TSLA | TSLA Price Prediction) ultimately finishes higher.

Before buying TSLL, it is crucial that investors understand how Tesla’s volatility interacts with leveraged ETF mechanics. In many cases, the biggest risk isn’t simply that Tesla stock price falls; instead, it’s that the stock becomes too volatile, even while trending upward.

Tesla’s Stock is Defined by Its Volatility Tesla has been one of the stock market’s biggest success stories over the past decade. Since its 2010 IPO, the stock has generated gains of well over 20,000%, going from a relatively small EV manufacturer into one of the world’s most valuable companies. Long-term shareholders who held throughout all of the volatility have been rewarded with extraordinary returns.

However, those gains have come with equally extraordinary price swings. Tesla has experienced multiple drawdowns exceeding 40%, including a decline of roughly 74% between November 2021 and January 2023 before eventually recovering to new highs. Even during strong bull markets, double-digit moves over a matter of days or weeks have been common for the stock, making Tesla one of the most volatile mega-cap stocks in the market.

This volatility is precisely why leveraged ETFs such as TSLL behave differently than the underlying stock itself. Large daily price swings can cause returns to diverge over time, meaning investors may not receive twice Tesla’s long-term performance, even when the stock ultimately trends higher (a phenomenon known as volatility decay).

How TSLL’s Leverage Mechanics Could Lose You Money TSLL seeks to deliver 200% of Tesla’s daily performance, resetting its leverage at the close of every trading session. That daily reset is what allows the fund to maintain its 2x target, but it also means returns can compound differently than the underlying stock over longer holding periods.

In steadily rising markets, TSLL can outperform by magnifying Tesla’s gains. Whereas in volatile and/or choppy sideways markets it’s a different story. When Tesla experiences large gains followed by large losses, or vice versa, TSLL must continually rebalance its exposure. This “buy high, sell low” effect can gradually erode returns.

For that reason, TSLL is generally designed for short-term tactical trading rather than long-term investing. Investors who expect to hold TSLL for years may find that simply owning the underlying asset (TSLA) produces far better long-term performance. The data supports this.

Key Fund Statistics Before investing in any leveraged ETF, it is important to understand the fund’s structure, costs, and objective. The following statistics provide a quick overview of TSLL and highlight several key characteristics that differentiate it from a traditional ETF.

Metric TSLL Underlying Asset Tesla (NASDAQ:TSLA) Inception Date August 9, 2022 Investment Objective 200% of Tesla’s daily return Rebalance Frequency Daily Net Assets $3.00B Expense Ratio 0.83% YTD Total Return -62.00% (Compared to -31.64% for TSLA) 1-year Total Return -36.80% (Compared to -5.57% for TSLA) 3-year Cumulative Return -53.10% (Compared to +15.39% for TSLA) 5-year Cumulative Return -65.18% (Compared to +42.56% for TSLA) Max Historical Drawdown -82.88% Final Takeaway TSLL can be a powerful trading tool, but it is not simply a faster version of owning Tesla stock. Because the fund resets its leverage daily, long-term returns can dramatically differ from Tesla’s own performance, particularly during periods of elevated volatility. As the historical data shows, investors who held TSLL over extended periods have often significantly underperformed those who simply owned shares directly in Tesla.

For most long-term investors, buying Tesla directly is likely the better choice. TSLL is best suited for traders with a short-term strong-conviction outlook that the stock is going to meaningfully move higher.

Contact [email protected] for any questions or corrections.

SpaceX SPCX shares slipped on Friday as investors looked ahead to the company's first earnings report as a public company and an upcoming insider share lock-up expiration.

The stock was down about 2.5% in early trading, changing hands near $109.

It has endured a volatile week, briefly falling to an all-time low of $107.01 before recovering.

For the week, the shares were down roughly 5% and have declined nearly 30% since their market debut at $150 last month.

The stock remains about 50% below its record high of $225.64.

Earnings and lock-up remain in focusInvestor attention is centered on SpaceX's second-quarter earnings report, scheduled for Aug. 4, which will provide the first detailed update on the company's performance since its public listing.

Another key event follows two days later, when the first lock-up expiration will allow eligible shareholders to sell up to 20% of their restricted holdings under the company's lock-up plan.

The prospect of a significant increase in tradable shares has weighed on sentiment in recent weeks, with investors concerned that additional supply could put further pressure on the stock.

The Wall Street Journal reported on Friday that Tesla executives have discussed options for separating the company's China business in the event of a future merger with SpaceX.

According to the report, advisers have considered alternatives including a spin-off, sale, or closure of Tesla's China operations, although the newspaper said the plans remain preliminary and could change.

The report said a merger between the two companies would likely face significant regulatory and geopolitical scrutiny because SpaceX is a major US defense contractor, while Tesla operates wholly owned manufacturing facilities in China.

The newspaper also reported that Chinese authorities could be concerned about a combined company gaining access to data from Tesla's customers in China.

Elon Musk denied the report, calling it "absurdly fake news" in a post on X.

"This has never even come up in a discussion ever," Musk wrote in response to the Journal's report.

Speculation about a combination of Tesla and SpaceX has intensified since SpaceX's initial public offering.

Last week, Musk declined to rule out a future merger, saying the two companies have become increasingly interconnected.

According to the Journal, Musk had previously instructed Tesla executives to maintain a clear separation between the company's US and China operations as a precaution against rising geopolitical tensions.

Tesla's Shanghai Gigafactory remains the automaker's largest manufacturing facility and a major export hub, with annual production capacity exceeding 950,000 vehicles.

The plant has historically accounted for more than half of Tesla's global vehicle deliveries.

With earnings approaching and the first major lock-up expiration days away, investors are expected to focus on management's outlook for growth, capital spending, and insider selling as the newly public company navigates its first major test in the public markets.

“If you're a SpaceX shareholder—if you like it or not, you're going to get Tesla. It's just a matter of time,” Paul Meeks, Head of Technology Research at Freedom Capital Markets, recently said in an interview with Investopedia.

Tesla is reportedly considering cleaving off its entire business in China to grease the wheels of a merger with SpaceX, according to the Wall Street Journal.

The newspaper reports that “some Tesla executives have been told to prepare for a separation of the China business,” which could include a “spinoff, sale or closure,” citing unnamed sources. The company reportedly would be able to do this fairly quickly because CEO Elon Musk had already tasked executives to prepare for a split in the event that Beijing invades Taiwan.

Separating China from Tesla’s global operations could make it easier to integrate the company into SpaceX, which is a defense contractor that has to follow strict rules around citizenship and national security. That would also be a major concession. China has grown to dominate Tesla’s business, not only as a market for its vehicles, but as a production hub that serves Asia more broadly, and also Europe.

Item 1 of 2 The interior of a Tesla Model 3 electric vehicle is shown in this picture illustration taken in Moscow, Russia July 23, 2020. Picture taken July 23, 2020. REUTERS/Evgenia Novozhenina

[1/2]The interior of a Tesla Model 3 electric vehicle is shown in this picture illustration taken in Moscow, Russia July 23, 2020. Picture taken July 23, 2020. REUTERS/Evgenia Novozhenina Purchase Licensing Rights, opens new tab

CompaniesJuly 31 (Reuters) - The National Highway Traffic Safety Administration said on Friday it has opened a preliminary investigation into about 1.2 million Tesla (TSLA.O), opens new tab vehicles over ​reports of suspension failures that could cause a loss of ‌vehicle steering control.

The regulator said its Office of Defects Investigation has received 156 complaints, alleging the front lower lateral link detached in certain 2018-2020 Model 3 and 2021-2023 ​Model Y vehicles.

Stay up to date on the key companies, data, and decisions in the ESG world with the Reuters Sustainable Finance newsletter. Sign up here.

NHTSA said the suspension failure could leave the vehicle ​undriveable and require it to be towed.

Tesla did not immediately respond ⁠to a Reuters request for comment.

NHTSA said most complaints indicated there ​was no advance warning before the failure, though some owners reported noises beforehand.

The ​agency said it was not aware of any crashes, injuries or fatalities related to the reported defect.

NHTSA is currently conducting a preliminary evaluation, the first stage of its defect ​investigation process, which could lead to a recall if the agency finds ​a safety-related defect.

Tesla has previously recalled vehicles over lower lateral link detachments. A 2021 ‌recall ⁠that covered about 2,800 Model 3 vehicles was due to a production issue, while a 2023 recall involved 422 Model 3 vehicles that experienced similar failures.

NHTSA said the reported failures in the new investigation extend beyond the scope ​of those recalls ​and do not ⁠appear to be related to the production issue that prompted them. The preliminary evaluation will examine the underlying cause, ​scope and severity of the potential defect.

Reuters reported in ​2023 that ⁠Tesla had internally tracked chronic failures of suspension and steering components for years, even as it frequently blamed the damage on driver abuse in communications with customers ⁠and ​U.S. regulators.

Tesla, ranked seventh by recall volume ​in the second quarter, issued three recalls affecting about 234,000 vehicles, according to recall management firm ​BizzyCar.

Reporting by Akash Sriram in Bengaluru; Editing by Janane Venkatraman and Shinjini Ganguli

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Short sellers have a history of betting against Elon Musk and epically failing, but their latest gamble is paying off and could continue to do so – at least for a while. On The Money has learned.

That would be their increasingly profitable bet against SpaceX, Musk’s futuristic mind-meld that combines space exploration with satellite internet service, plus a heavy dose to AI and social media. Yes it’s a mouthful, and the IPO just a few weeks ago was a hot one – Musk raised $85 billion and the debut price of $135 a share quickly shot to above $175 in the first day of trading.

It’s been downhill ever since. While buy-and-hold investors are taking a beating, SpaceX has become a bonanza for short sellers – investors who make money when stocks fall. As of publication, around 35% of SpaceX’s public shares are being shorted, well above the average of 5%. They’ve been ringing the cash register as shares have fallen 36% from their intraday high. 

The SpaceX IPO just a few weeks ago was a hot one – Elon Musk raised $85 billion and the debut price of $135 a share quickly shot to above $175 in the first day of trading. It’s been downhill ever since. Jack Forbes / NY Post Design For obvious reasons, lots of investors hate short sellers for publishing research that sends shares lower. But the market is full of touts, and the practice warns investors where market risks are buried.

SpaceX is filled with risks, if the shorts are right. The growing short “interest” in SpaceX is a “super bearish” sign, says Bob Sloan the founder of S3 Partners, a firm that provides financial analytics to institutional investors to help them position trades. (Bob is also my partner on the “Risk and Return” podcast).

Ok, they’re bearish, but are they right – and for how long? Musk is a brilliant and mercurial entrepreneur who has long attracted critics and naysayers. Recall the disastrous shorting of Musk’s other baby, Tesla. The operative word is “now” because back in 2018, Tesla looked like it was heading for bankruptcy amid questions about its accounting, production timetable, and Musk’s often erratic behavior.

The shorts had a field day – that is, until Musk and his team got their act together. The stock took off eventually, becoming a market darling and leaving the pessimists in the dust.

Musk on the day of SpaceX’s debut on the Nasdaq.SpaceX has become a bonanza for short sellers – investors who make money when stocks fall. REUTERS Sloan’s data suggest that there’s more room for short-term declines. He notes that SpaceX isn’t in the S&P 500 yet, which makes the bearishness even more profound since short sellers are more prone to short shares that appear in the index for hedging purposes.

Meanwhile, SpaceX announces earnings next week on Aug. 4, which will likely be losses. It’s a startup, so that is already baked into its current share price of around $112. What might not be is that two days later the company’s first “lockup” ends, meaning SpaceX so-called insider shareholders (its initial investors) can sell as much as 911.5 million shares – more than the entire float. That will add to the downward pressure.

S3’s research shows the shorts are smelling blood for the lockup ending. Just Monday and Tuesday of this week alone, they’ve added 37.7 million shares to their negative bets.

SpaceX is also getting jabbed by its association with the AI sector, which has been getting pummeled lately by investors skeptical about its past lofty valuations and the growing expense of building all those data centers. The selloff recently smacked a $20 billion hedge fund, Situational Awareness, that had been considered a bellwether of the entire sector.

It’s a good bet that there is more pain to come for SpaceX shareholders, at least in the short term. Still, the short sellers should remember betting against Musk is risky business. If you don’t believe me, look at a long-term chart of Tesla.