Tesla (TSLA -2.14%) has continued its habit of providing overly optimistic forecasts, and investors are realizing that the company's prospects may not be as good as they say.
*Stock prices used were the afternoon prices of July 22, 2026. The video was published on July 24, 2026.
Parkev Tatevosian, CFA has the following options: long December 2026 $320 puts on Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Tesla (TSLA -2.14%) shareholders had a rough Thursday. Shares of the electric car maker sank about 15% following the company's second-quarter report, closing at $319.69 -- near the bottom of a 52-week range that runs from $297.82 to $498.83.
But Wall Street barely budged. The average analyst price target on the stock sits near $412 as of this writing, about 29% above Thursday's close. And across the 44 analysts covering the company, the consensus rating is still a buy.
That's quite a gap. So is the drop a buying opportunity, or is Wall Street just slow to mark down a story it has believed in for years?
Image source: Tesla.
The quarter behind the drop Tesla's revenue rose 26% year over year to $28.2 billion in the second quarter of 2026, helped by 480,126 vehicle deliveries -- the company's best second quarter ever. That marked an acceleration from 16% growth in Q1, and it pushed the company past $100 billion in trailing-12-month revenue for the first time. After revenue shrank last year, the top line is moving again.
The profit side is another matter. Operating income fell 57% year over year to $398 million, squeezing Tesla's operating margin to 1.4% from 4.1% a year earlier. Adjusted earnings per share came in at $0.33, down 18% from a year earlier. For every dollar of record revenue, barely a penny reached operating profit.
Notably, the problem wasn't the economics of selling cars. Tesla's automotive gross margin slipped only modestly, to 16.9%.
The damage came from everything below that line, as the company spends heavily on AI (artificial intelligence), its robotaxi service, and its Optimus robot program, plus stock-based compensation tied to CEO Elon Musk's 2025 pay award. Regulatory credit revenue, a high-margin helper in past quarters, also collapsed 67% to $146 million.
And for the first time in years, the quarter burned cash. Capital expenditures more than doubled to $5.8 billion, pushing free cash flow to negative $1.1 billion.
In short, Tesla delivered record second-quarter volume and record revenue, and almost none of it reached operating profit. That's the quarter the market repriced on Thursday.
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What the 29% of upside is made of Now back to that $412 average price target.
A price target is a model's output. And the analysts behind those models are, on average, still crediting Tesla for a future of high-margin software, a scaled robotaxi network, and strong returns on all of this AI spending. The 29% gap between the target and Thursday's close arguably measures faith in that future more than it measures a discount on the business Tesla runs today.
After all, even at $319.69, the stock trades at about 300 times earnings. A company earning $0.33 a share in its best revenue quarter ever doesn't support a price like that on its own. So much future success is already priced in that the shares can fall 15% and still not look cheap on any near-term measure.
To be fair, the report offered evidence the newer businesses are moving. Services and other revenue rose 50% year over year, and energy storage deployments climbed 41% to 13.5 gigawatt-hours. But those lines remain small next to the car business that still pays Tesla's bills, and neither is yet big enough to carry the company's margin on its own.
So I don't treat the gap between the price and the target as an opportunity in itself. Targets get updated on a delay after a move this size.
The average could keep drifting down toward the price instead of the price rising to meet it.
Could the models be right? Sure.
If Tesla's robotaxi and AI bets pay off on anything like the timeline the bulls expect, today's price may well look cheap in hindsight. That has happened with this company before. I just don't think investors should pay about 300 times earnings for that outcome while the operating margin sits at 1.4% and the spending is still accelerating.
I'm not buying the drop, and the 29% of upside on paper doesn't change that. What would get my attention is profit growth showing up alongside the revenue growth.
SummaryI previously called the SpaceX optionality, and that call was dead wrong. The business underneath it got worse, so I'm downgrading to a sell.Texas registrations quadrupled in six weeks. Cars actually driving unsupervised: still about twenty. Registered isn't driving, and I need unsupervised autonomous driving.Strip out the SpaceX mark and the tax benefit, and roughly $77 million of profit is left on $28.2 billion of revenue. A 1.4% operating margin is the real quarter.I'm watching two things into late October: does the driverless fleet finally grow, and does SPCX bounce back? If they do, this downgrade ages badly. hirun/iStock via Getty Images
Two-thirds of Tesla's (TSLA) reported profit this quarter traces back to a stock Elon Musk's other company just took public.
Equity gains, or should I say “gainz” to sound a bit cooler, because there are quite a few tech
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SummaryTesla faces significant program delays in robotaxi and humanoid robots, undermining its first-mover advantage and premium valuation.Q2 '26 results showed a big EPS miss, heavy capex of $5.8B, and negative free cash flow, despite a revenue beat.TSLA continues aggressive spending on unproven products, with capex plans exceeding $25B and no near-term revenue visibility from major robotaxi and robots catalysts.The stock should be avoided, trading at 170x forward EPS with delayed growth drivers and heightened execution risk.Looking for more investing ideas like this one? Get them exclusively at Out Fox The Street. Learn More » julos/iStock via Getty Images
Tesla, Inc. (TSLA) crashed this week as the company confirmed further delays in key programs, further eroding any first-mover advantage potential. The stock is now below levels originally hit back in late 2021, likely contributing to
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Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
The most interesting exchange on Tesla's (TSLA -2.14%) July 22 earnings call wasn't about margins. An analyst asked CEO Elon Musk whether he eventually sees synergies from combining Tesla with SpaceX (SPCX -2.85%), the rocket and satellite company that went public in June. Musk didn't say yes. More notably, he didn't say no.
There's "more and more overlap" between the two companies, Musk said on the call. He pointed in particular to Terafab, SpaceX's planned chipmaking venture, which he said is "really going to be a gigantic project."
As for a deal, Musk said he couldn't discuss "combining companies and that kind of thing" in that setting. It has to happen through "the appropriate process."
That is not a denial. And coming from the CEO of both companies, it's enough to make a merger a live question for two of the largest shareholder bases in the market.
Image source: White House.
The overlap is already real business The companies are intertwined today. Tesla's general counsel noted on the call that the relationship deepened this year through an investment and a framework agreement between the two companies. Grok, the AI (artificial intelligence) assistant built into Tesla vehicles, comes from the xAI business SpaceX absorbed before its initial public offering (IPO). Tesla's Cybercab robotaxis are expected to lean on SpaceX's Starlink network for connectivity. And Terafab could eventually supply the chips Tesla needs for its cars and robots.
Bankers have noticed, too. JPMorgan told clients this month that a combination would make strategic sense on paper, uniting Musk's ambitions in AI, transportation, and space under one roof. But the firm also cautioned that executing a deal is a far messier matter than the logic suggests.
The messy part deserves the emphasis. Two obstacles stand out.
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The first is pricing. A merger needs an exchange ratio (how many shares of one company each share of the other is worth), and both of these stocks trade on stories rather than current profits. SpaceX carries a $1.5 trillion market value on trailing-12-month revenue of about $19 billion (up 33% from the year before), and it's still unprofitable. Tesla, valued at about $1.2 trillion, trades at more than 300 times earnings after this week's post-earnings sell-off.
Musk himself complicates the math. He controls about 85% of SpaceX's voting power, versus about 20% of Tesla's, so he effectively sits on both sides of the negotiation. Tesla's board needs an independent process robust enough to survive the shareholder lawsuits that reliably follow deals like this one.
The second obstacle is Washington. SpaceX is a major defense and government contractor. Tesla operates one of its largest factories in Shanghai and depends on China for a meaningful share of its sales and supply chain. Folding a national security asset into a company with deep Chinese exposure invites regulatory scrutiny in both countries -- and Starlink isn't even approved to operate in China. Of course, a review like that could stretch on for years, with no guarantee of approval.
Which shareholders would a deal reward? It depends entirely on the exchange ratio, and that's the problem. SpaceX shareholders own the larger company by market value, and the asset Musk has the deeper economic interest in. Tesla shareholders get exposure to Starlink's fast-growing revenue in a deal, but they'd be paying with stock the ultimate decision maker has less personal incentive to defend. Every version of the math involves the same person on both sides of the table.
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My take is that investors shouldn't own either stock because of a potential merger. A combination may eventually happen, and Musk's comments suggest the idea is at least alive. But the timing and terms are unknowable today, and the regulatory path could take years.
What investors can evaluate is each business on its own. Tesla just reported a 1.4% operating margin for the second quarter as it pours money into AI and robotaxis, and its shares sank about 14% on Thursday. SpaceX is weeks away from its first earnings report, due Aug. 4. Both stocks already price in spectacular futures, and I think each company should have to prove its own case first. Treat any merger as news to react to if it comes. Betting on it in advance is just speculation.
Tesla (TSLA) was the worst performing stock in the S&P 500 (SPX) this week. @CharlesSchwab's Rachel Dashiell looks at the charts and the options activity as the company trades near a 52-week low.
Tesla shares plunged 18% during the week to close at $313.03 on Friday, their worst weekly slump since 2022. And SpaceX continued its downward slide, dropping 7.2% over five days to close at $115.07 Friday, its lowest since the company's record IPO last month.
The declines in both stocks wiped away about $130 billion of Musk's wealth, weeks after he'd become the world's first trillionaire. In a post on X on Friday, Musk wrote, "(Former) trillionaire."
Tesla's slump was spurred by weaker-than-expected earnings when the electric vehicle maker reported second-quarter results late Wednesday. The company turned cash flow negative due to a surge in spending on futuristic projects like robotaxis, humanoid robots and a giant chip fab.
"We expect this to pressure free cash flow and delay earnings growth, without providing any near-term shareholder return," wrote analysts at Argus Research, which has a hold rating on the stock, in a report on Friday. "We believe it will be nearly impossible for Tesla to generate any consistency in profit growth in the near-term."
Tesla's stock is now down 30% for the year, by far the worst performer among tech's megacaps.
Read more CNBC tech newsMoonshot AI accessed Nvidia's chips despite Chinese export ban, White House official saysAlphabet and Tesla test Wall Street's patience as AI spending overshadows growthAlphabet earnings takeaways: Q2 revenue beats, GOOGL stock sinks on 2026 capex hikeTesla misses on earnings, as free cash flow turns negative and margins slideMeanwhile, SpaceX's stock has been on a steady downward trajectory over the past month following an initial pop when the company went public. The shares have dropped for four of the past five weeks and are about 43% off their peak close on June 16.
On Friday evening, SpaceX will again attempt the 13th test flight of Starship, the largest rocket ever built or flown. The company plans to fly the new version of the rocket, Starship V3, from its company town and launch facility in Starbase, Texas. The rocket is designed to be fully reusable and is considered crucial for SpaceX's near-term aims to vastly grow its Starlink satellite network.
In a post on X, which is owned by SpaceX, the company said it delayed the test flight planned for Thursday "due to weather." SpaceX previously scrubbed a test flight last week, after the rocket's booster triggered a hold, which "shut down the engines right as they were starting to ignite," a SpaceX employee said during a livestream of the event.
A successful launch of Starship V3, an upgraded version of its roughly 400-foot-tall rocket, would be the first since the company's IPO.
SpaceX plans to use Starship to bring U.S. astronauts back to the Moon's surface, and Musk wants the rocket to eventually run manned missions to Mars.
Musk made a public appearance this week, sitting down for what turned out to be a contentious interview with The Economist.
Zanny Minton Beddoes, editor-in-chief of the publication, asked Musk about his support for "not just the populist right, but the far right, in fact very fringe parties in some countries."
In addition to his financial and vocal support for President Donald Trump, including his work for the second administration, Musk has endorsed Germany's AfD, an extreme anti-immigrant party, as well as the UK's Restore Britain, founded by Rupert Lowe, who also calls to "reverse mass migration."
"It's just normal people!" Musk said in response. He berated Beddoes and "the traditional media" for an "absurd characterization of the far right."
Tesla (TSLA -3.22%) needs no introduction. The Elon Musk-led technology business ranks 11th among the world's most valuable companies. And it's working on interesting projects to usher in what its management calls a world of "amazing abundance."
The company's ascent proves just how much of a favorite it is among market participants. If you'd invested $10,000 in Tesla stock exactly 10 years ago, here's how much you'd have today.
Image source: The Motley Fool.
Tesla has been a monster winner. On a total return basis, its shares have skyrocketed 2,420% in the past 10 years (as of July 23), turning $10,000 into $252,400 today. If you had put that same amount of capital into an S&P 500 exchange-traded fund, you'd have $40,760 in total return right now.
The stock's biggest catalyst has been the company's phenomenal growth. From an unknown automotive start-up to an electric vehicle (EV) leader, Tesla delivered over 480,100 EVs in the quarter ended June 30. That's up from 14,400 cars in Q2 2016.
That kind of expansion supported incredible revenue gains. Tesla's top line went from $1.3 billion in the second quarter of 2016 to $28.2 billion in Q2 of this year.
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It's hard to say exactly what Tesla's operations will look like 10 years from now. But management has high hopes. The business could be collecting massive profits and cash flow from self-driving and robotics technology, as well as its energy segment.
But with the stock trading at a nosebleed price-to-earnings ratio of 343, success appears to be fully baked in.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The bearish Tesla set-up we flagged ahead of Wednesday's report has delivered most of what it can. Two ways forward: bank the entire gain, or press the same playbook against another priced-for-perfection name reporting in two weeks.
Heading into Tesla's second-quarter report, I argued the risks were skewed to the downside. Greeting a delivery beat with selling was a classic tell of expectations "priced for perfection." While revenue of $28.2 billion beat handily, up 26% year over year, adjusted earnings of 34 cents per share missed the consensus (50 cents) by a wide margin. Operating margin compressed to 1.4%, and a 142% surge in capital spending swung free cash flow negative. Combining disappointing EPS, a call for patience (this is the pattern with Tesla) on robotaxi, and the stock slid roughly 14.5% Thursday, through our short put strike, and closed near the move targeted by the trade. Investors are apparently more interested in the "show" rather than the "tell" in Tesla earnings.
Which brings us to the less glamorous but more important part of trading: what to do when a position works. Our bearish structure has captured the bulk of its maximum potential value. When most of the possible profit is already in hand, the math flips against you — what's left to earn is small relative to what you'd give back if the stock snaps back (a possibility I consider quite unlikely). So that leaves us with a couple reasonable paths:
Path one: take the money and run. Close the position, book the gain, and wait for another fat pitch. There is never anything wrong with this. There's an old saw in investing: "One never loses money taking profits." Platitudinous admittedly, but we'll reserve a more nuanced approach for another day.
Path two: bank most of it, and press. Make a similar play with "house money". Somewhat emboldened, redeploy a portion of the profits toward another high-multiple pioneering company whose valuation and price action make it vulnerable to disappointment: Palantir, which reports August 3rd.
The counterpoints on PalantirPalantir is a remarkable company, one of my favorites actually. But several counterpoints deserve weight heading into the print. The stated ambition to grow revenues tenfold without scaling the sales force is, to put it charitably, ambitious. Competition among LLM providers is likely to intensify, and enterprise customers increasingly look to deploy large language models directly rather than through an intermediary platform. The total addressable market, while large, is finite — and international sales are likely to be constrained by the understandable preference for local vendors wherever national security is concerned.
The numbers, while good, were less good last quarter. Commercial backlog growth slowed to 12% in the first quarter, per Bloomberg, down from 21% in the fourth quarter of 2025. And even net of its recent declines, Palantir trades at a material premium to its software peer group — and well above its own historical EV/sales average.
For context, the average move in Palantir from one week before earnings (about where we are now) through two weeks after (consistent with August regular way expiration) is approximately 26%!
Palantir, YTD
The options market is pricing a one-day earnings move of 9.5% — larger than the past four quarters delivered, but substantially below the long-term average of more than 14%. That suggests August options, expensive as they appear at 65% implied volatility, may be reasonably priced, particularly if you use spreads, selling one expensive option against another to neutralize the volatility premium.
So, what to do.
Step 1: Close the TSLA position — sell the August 360/330 put spread, banking at ~$23, well more than a double from the price at which we put it on.
Step 2 (for those pressing): Buy the PLTR August 21st $120/$95 put spread for ~$6.50, funded with a portion of the TSLA proceeds.
Risk is defined to the debit paid.
Max profit: the $25 spread width less the debit, if PLTR closes at or below $95 at expiration — a decline of roughly 23% from current levels, in line with the historical three-week earnings window.
The short $95 put materially offsets the 65% vol premium embedded in the long strike.
Like the Tesla trade, the Palantir put spread offers defined risk, and for those using the proceeds from the winner in Tesla, less than the "house money" (profits) collected on the first trade.
Tesla (TSLA) avoided a formal federal safety investigation into its door-release design, but regulators said the complaints exposed a broader gap in existing ve
Tesla briefly lost its $1 trillion market capitalization on Friday as shares extended losses following a disappointing second-quarter earnings report, underscoring investor concerns over the electric vehicle maker's profitability and the growing scrutiny surrounding CEO Elon Musk's long-term vision.
Tesla stock fell as much as 3.65% during Friday's session to an intraday low of $308, reducing the company's market value to approximately $996.1 billion.
The shares later recovered enough to push Tesla's valuation back above the $1 trillion mark, although the stock remained under pressure after Thursday's steep post-earnings decline.
The latest move follows a 14% plunge after the company's quarterly results, as investors reacted to weaker-than-expected profits despite stronger vehicle deliveries and rising revenue.
Tesla reported second-quarter operating profit of $398 million, down from $923 million a year earlier and well below Wall Street's expectation of $1.7 billion, according to FactSet.
The company sold around 480,000 vehicles during the quarter, up 25% year over year and roughly 80,000 more than analysts had projected.
However, weaker pricing, an unfavorable vehicle mix, lower regulatory credit sales, rising costs and higher research spending weighed heavily on profitability.
For many investors, the earnings miss itself was less significant than growing questions about whether Musk can continue to justify Tesla's premium valuation through future growth initiatives.
During the earnings call, Musk reiterated his long-term ambitions for Tesla, highlighting continued growth in robotaxis and humanoid robots while introducing the idea of the Megapod, a modular artificial intelligence data center built with Tesla hardware.
“We’re working on what we believe is the most ambitious buildout of advanced infrastructure manufacturing capacity ever in history,” he said.
Despite the earnings disappointment, Wall Street analysts largely maintained their ratings on the stock.
According to FactSet, the average analyst price target declined by only $8 to $392.
Analysts broadly characterized Tesla's elevated spending as part of a broader transition toward autonomous driving, robotics and AI infrastructure.
RBC analyst Tom Narayan maintained optimism around Tesla's robotaxi and humanoid robot opportunities while stating that nothing is “fundamentally wrong with the business.”
Tesla's valuation continues to stand apart from traditional automakers.
The company trades at roughly 175 times projected 2026 earnings, compared with an average multiple of about 24 times for the rest of the Magnificent Seven, according to the provided data.
Bill Birmingham, managing director at Rex Shares, said in a Barron's report that the valuation reflects investors' focus on future software and autonomous technologies rather than current vehicle sales.
“The valuation is already saying that investors are paying less attention to vehicle deliveries and more attention to whether high-margin software, autonomy, power, and eventually robot revenue arrive quickly enough to offset structurally lower auto margins,” he added.
Canaccord analyst George Gianarikas also maintained a Buy rating, although he reduced his price target by $40 to $410 following the earnings release.
“We have walked this Tesla tightrope before,” says Canaccord analyst George Gianarikas. “History has taught us, betting against Elon Musk is usually a fool’s errand.”
Meanwhile, Cathie Wood's Ark Investment Management used the selloff to increase its Tesla exposure.
According to the firm's daily trading disclosures, Ark purchased approximately $51.2 million worth of Tesla shares across four exchange-traded funds following the earnings release.
The window for Flight 13 opens at 6:45 p.m. EDT at Starbase, Texas.
Neither stage will be recovered, with the Super Heavy booster and Starship upper stage targeting controlled splashdowns in the Gulf of Mexico and Indian Ocean.
Traders See Launch as Near Certainty, Splashdown Less SoOn Polymarket, traders assign an 81% chance of a successful launch today, and roughly a 91% chance that Starship flies by July 31.
Traders price a 72% chance of a controlled Starship splashdown, meaning the ship survives reentry and comes down where SpaceX aims it.
Starship will attempt to deploy 20 V3 Starlink satellites, next-generation broadband units that are reportedly too large to fly on Falcon 9.
Starlink already generates the bulk of SpaceX’s revenue, but the bigger V3 satellites that would expand the network’s capacity can only reach orbit on Starship.
Six of the satellites carry cameras that will scan Starship’s heat shield prior to reentry and beam imagery to operators. SpaceX has painted several tiles white to simulate missing ones, testing whether it can verify from orbit that a ship is safe to fly home, a prerequisite for catching and reusing Starship.
Why It Matters for SPCXFull reusability is what underpins Musk’s promise of dramatically cheaper launches, the assumption baked into much of the SpaceX bull case.
The launch comes at a delicate moment for SpaceX. The stock is trading near $117 this morning, roughly 13% below its $135 June listing price, and touched an all-time low this week.
Short interest reportedly grew to 32% as Musk warned short sellers they won’t survive, and the Aug. 4 earnings call is followed by an Aug. 6 lock-up expiration freeing roughly 900 million insider-held shares.
“Starship becoming operational is the critical path to the SpaceX investment thesis,” Raymond James analyst Brian Gesuale wrote recently.
photo: Kemarrravv13 via Shutterstock
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At $319.69, Tesla (NASDAQ:TSLA | TSLA Price Prediction) stock deserves a fresh view because a disastrous Q2 earnings collided with a sky high valuation.
Tesla remains the largest EV manufacturer by volume and the most speculative AI play packaged inside a car company, with a market cap of roughly $1.40 trillion. TSLA fell 14.52% in a single session after Q2, capping a 18.25% one-week drop as investors digested collapsing margins and a cash-burning AI capex cycle.
Why Bulls Say the Selloff Is a Gift Q2 revenue landed at $28.24 billion, beating consensus by 7.10% on 25.5% YoY growth, with record deliveries of 480,126 vehicles. Energy storage deployments grew 41% YoY to 13.5 GWh, and Services revenue jumped 50%.
FSD subscriptions reached 1.48 million, up 56% YoY, the Robotaxi network is now unsupervised in seven US metros, and Optimus production lines are being installed. A $43.52 billion cash pile funds it all. Wall Street’s consensus target of $425.09 implies roughly 33% upside from here.
Why Bears Say This Is Money on Fire Non-GAAP EPS came in at $0.33, missing the $0.5367 estimate by 38.51%. Operating income fell 56.88% to $398 million, crushing operating margin to 1.4%. Free cash flow flipped negative to -$1.09 billion, an 847.95% reversal, as CapEx exploded 141.81% to $5.79 billion.
Valuation makes the miss unforgivable. TSLA trades at a trailing P/E near 316x with a forward multiple of 167x against a return on equity of 4.89%. Polymarket’s crowd puts a 71% probability on shares hitting $315 in July, and one Reddit thread titled “Tesla misses on earnings despite revenue beat” is driving the loudest post-earnings sentiment.
Why Some Argue for Patience Instead The hold case rests on optionality. Revenue growth is real, cash is abundant, and the AI, Robotaxi, and Optimus lines could eventually justify the spending. Management said “hardware-related profits to be accompanied by an acceleration of AI, software, and fleet-based profits.”
The tell will be margin recovery. If Q3 shows operating margin climbing back toward the 21.1% auto gross margin printed in Q1, patience gets rewarded. If not, holders are financing capex without earnings to show for it.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Tesla didn't make the cut. Grab the names FREE today.
What the Numbers Actually Say TSLA currently trades at $319.69, down 28.91% year-to-date while the S&P 500 is up 8.25%. The consensus price target of $425.09 implies about 33% upside, but targets lag fast-changing fundamentals.
Coverage spans 47 analysts:
Strong Buy: 5 Buy: 18 Hold: 18 Sell: 4 Strong Sell: 2 Shares sit well below the $407.47 50-day and $415.96 200-day moving averages, mirroring fundamental deterioration.
The Verdict At $319.69, Tesla looks richly valued against deteriorating fundamentals.
A 1.4% operating margin on 316x earnings is untenable. With FCF negative and CapEx guided toward a $25 billion budget, next quarter faces the same margin squeeze. Regulatory credit revenue is fading, ASPs are slipping, and warranty charges tied to a vendor cell issue add drag.
Fair value, using auto-industry earnings power rather than AI dreamware, sits closer to $180 to $210. That implies the current price still embeds significant Robotaxi and Optimus success that the crowd is fading: Polymarket puts Optimus release by year-end at just 24% and Robovan orders at 8.5%.
The thesis breaks if Q3 delivers sharp margin recovery, FSD monetization inflects, or Optimus ships on schedule. Absent those, every dollar chased above $300 is capital rented to an AI capex cycle with no proven return.
Buying a 15% dip on a stock priced for flawless execution while execution is failing is catching a knife.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Tesla didn't make the cut. Grab the names FREE today.
Tesla, Inc. (TSLA -3.01%) told investors on its Wednesday earnings call that it still plans to invest more than $25 billion on capital projects by the end of this year. The statement reaffirms guidance laid out in April, even as its Q2 profits came in well below what Wall Street expected.
Capital expenditures (capex) -- the money a company puts into factories, equipment, and other long-lived assets -- hit $5.8 billion in the quarter alone. That’s 142% more than the $2.4 billion the company spent in the same quarter a year ago.
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As of 10:20 a.m. ET on Friday, Tesla shares have fallen more than 16% since markets closed on Wednesday. The S&P 500 and the Nasdaq Composite were down about 1.3% and 2.8%, respectively, over the same stretch.
Tesla wants to build fastChief Financial Officer Vaibhav Taneja confirmed the company is on track to spend $25 billion. More increases are expected over the next two to three years, with the funds earmarked for the company’s Robotaxi fleet, AI computing infrastructure, Optimus manufacturing, and semiconductor fabrication.
CEO Elon Musk framed the strategy as speed over thrift. "We should be spending on capex as fast as we can spend, as fast as we can without it being too wasteful," he said on the call, adding, "it's OK to be a little less capital efficient if we get things done sooner."
Optimus, the company’s humanoid robot, is one of Tesla’s top priorities, with Musk having called it a $10 trillion business in the past. The company pulled its Model S and Model X production lines out of the Fremont plant to clear space for first-generation Optimus robots.
Image Source: Company Image
The first units to roll off the line won’t be headed to customers, however. Rather, "the initial Optimus builds will be used in [its] Optimus Academy for training data collection and further functionality development."
Cybercab, the company’s robotaxi, has already begun production at Tesla’s Gigafactory Texas, and Semi production is expected to ramp this year at a new Nevada plant.
Tesla’s numbers missed the markThe quarter's top line was strong. Sales topped $28.2 billion, a 26% increase from a year earlier. That was substantially higher than Wall Street had expected, but it was mostly where the good news ended.
Gross margins fell considerably from 17.2% to 16.8%. Analysts expected an increase to 19.4%. Profits slid as well: non-GAAP earnings came in at $0.33 per share versus the expected $0.51.
The bottom lineTesla is going through a major period of transition, and there are some potentially exciting things happening. The company’s robotaxis are now live in seven cities, the first Optimus robots should be coming off the line by the end of the year, and after some major hits to its sales figures last year in Europe, registrations were up sharply in June across France, Sweden, Italy, and Portugal.
That being said, I’m still a skeptic. Tesla is spending record sums on businesses that don't generate revenue yet and, despite their exciting nature, may never become real businesses. Margins are taking a beating, and the company’s CEO is running two of the largest companies around at the same time.
And even after shares have fallen more than 35% since their highs at the end of last year, they are still trading at incredible multiples.
TSLA's Q2 miss, margin pressure and heavy spending triggered a 14% slide, but stabilizing EV demand, balance sheet strength and FSD gains support a hold.
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Tesla, Inc. reported Q2 FY2026 earnings that triggered a 14.7% stock drop, reflecting investor skepticism over its strategic pivot. TSLA is shifting from a carmaker to an AI conglomerate, with 2026 capex set to exceed $25 billion and negative free cash flow emerging. Automotive revenues rose 8% but were driven by price cuts and incentives, compressing gross margins to 16.3% and signaling core business pressure.
July has been a horrible month for the stock prices of Elon Musk’s two publicly traded companies: Tesla (Nasdaq: TSLA) and SpaceX (Nasdaq: SPCX).
As of the close of markets yesterday, the two companies have seen their stock prices decline by roughly 24% and 31%, respectively, since June 30. Here’s what you need to know.
Tesla stock got hammered yesterdayLet’s start with Tesla, Inc. While the electric vehicle company has seen its stock price decline for most of July, the drop had been subtle, and similar to what most major tech stocks had seen across the month.
However, then yesterday came, and TSLA stock crashed more than 14.5% in a single trading session, ending the day down $54.32 to $319.69.
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So what the heck happened? In short: Tesla’s earnings happened.
Yesterday, the company revealed its financial results for the second quarter of fiscal year 2026. For the quarter, Tesla reported revenue of $28.24 billion, representing roughly 26% growth from the same quarter a year earlier.
That type of growth is nothing to sneeze at, and, as noted by CNBC, Tesla’s Q2 revenue came in well ahead of the $25.71 billion LSEG analysts were expecting.
The stock plunged 14.52% to close at $319.69—the largest one-day loss in Tesla’s history. Trading volume surged to 115.61 million shares, more than double its three-month daily average of 49.4 million shares.
Earnings Miss Was Only the BeginningTesla’s second-quarter results gave investors multiple reasons to hit the sell button.
While revenue topped Wall Street estimates, adjusted earnings of 33 cents per share fell well short of expectations as automotive margins deteriorated. Gross margin slipped below analyst forecasts, highlighting continued pressure on Tesla’s core vehicle business even as deliveries improved.
But the bigger surprise came below the income statement.
Tesla reported negative free cash flow for the first time in more than two years after capital expenditures more than doubled to roughly $5.8 billion. Management also said capital spending will exceed $25 billion in 2026 and continue climbing as the company ramps investments in robotaxis, Optimus humanoid robots, AI infrastructure and next-generation manufacturing.
Wall Street Wanted More Than AI PromisesTesla has long argued that its future valuation depends less on selling cars and more on becoming an AI and robotics company.
The earnings call reinforced that strategy, but investors appeared unconvinced that the payoff is close enough to justify the growing bill. Analysts noted that while spending plans became clearer, updates on commercialization timelines for Robotaxi, Optimus and other AI initiatives offered few new catalysts to offset concerns about mounting cash burn.
The market’s reaction suggests investors are beginning to ask a tougher question: if Tesla is entering one of the heaviest investment cycles in its history, how long will shareholders have to wait before those billions translate into higher earnings?
Thursday’s answer was painful. In a single trading session, Tesla lost more market value than Toyota is worth. And with JPMorgan and UBS joining the growing list of firms trimming their expectations, Wall Street is signaling that Tesla’s AI future may take longer—and cost more—than investors had anticipated.
Photo: TY Lim / Shutterstock
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Tesla (NASDAQ:TSLA | TSLA Price Prediction) delivered a split-decision quarter: a big revenue beat wrapped around an ugly EPS miss. Wall Street trimmed price targets without walking away from the story. Our model comes out constructive.
Tesla trades at $374.01 after a roughly 4% after-hours slide that erased $71 billion in market cap. Our 24/7 Wall St. price target is $413.49, implying 10.56% upside over twelve months. The recommendation is buy with 90% confidence level confidence.
Metric Value Current Price $374.01 24/7 Wall St. Price Target $413.49 Upside 10.56% Recommendation BUY Confidence 90% A Record Quarter That Cost $71 Billion Tesla posted $28.24 billion in Q2 revenue, up 25.52% year over year and beating consensus by 7.10%, on record deliveries of 480,126 vehicles.
Non-GAAP EPS of $0.33 missed the $0.5367 estimate by 38.51%, operating margin compressed to 1.4%, and free cash flow flipped to negative $1.09 billion as capex surged to $5.79 billion. Shares are down 5.18% this week and 16.83% year to date, though up 12.62% over the past year.
Why Bulls See a Breakout Ahead The bull case rests on Tesla’s transition to an AI and robotics platform. FSD attach rates on North American deliveries exceeded 55%, with 1.48 million active subscriptions (up 56% YoY).
Cybercab production has begun at Gigafactory Texas, robotaxi service covers seven US metros, and Optimus lines are installed at Fremont. Energy storage deployments jumped to 13.5 GWh. Our bull scenario points to $479.66 within twelve months, a 28.25% return.
The Risks Worth Watching The bear case flips the spending story. Operating income fell 56.88% YoY, opex jumped 47%, and regulatory credits collapsed to $146 million. Reddit sentiment tracked bearish (24 to 36) after the earnings report. Multiple analysts slashed the price target after earnings.
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Bulls counter that margin damage is self-inflicted, with heavy AI infrastructure and stock-based comp from the 2025 CEO Performance Award weighing on GAAP profits, while operating cash flow rose 84.9% to $4.70 billion and cash swelled to $43.52 billion. Our bear scenario lands at $365.83, a 2.19% decline.
How Tesla Compares to GM and Rivian General Motors (NYSE:GM) is the anti-Tesla trade. GM posted its 16th consecutive earnings beat, with adjusted earnings up 41.3% and raised full-year 2026 guidance, plus roughly 75 million shares retired in the past year. That execution at a fraction of Tesla’s 370 P/E is why our $413.49 target must earn its premium through AI optionality, not vehicle economics.
Rivian (NASDAQ:RIVN) is the pure-play EV comp fighting for scale. Rivian lacks Tesla’s 480,126-unit quarterly cadence and $43.52 billion cash pile, making Tesla’s balance sheet look conservative and supporting our target as reasonable rather than aggressive.
Tesla Price Prediction 2026 to 2030 Our 24/7 Wall St. price target for Tesla is $413.49, a buy with 90% confidence. Q2 shows demand strength (record deliveries, revenue beat) with misses concentrated in discretionary AI and Optimus spending Tesla chose to accelerate.
I’d buy here if capex converts into robotaxi and Optimus revenue on the 2027 timeline management outlined. I’d stay on the sidelines if operating margin fails to recover above 5% by year-end.
Year 24/7 Wall St. Price Target 2026 $413.49 2027 $445.00 2028 $475.00 2029 $505.00 2030 $538.14 These projections assume Tesla executes on robotaxi monetization and Optimus reaches commercial scale. Significant upside or downside could result from FSD adoption curves and margin recovery pace.
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Tesla Inc. (NASDAQ:TSLA) is in the spotlight Friday after a busy July that included record delivery figures, a closely watched earnings report and a sharp post-earnings selloff.
Tesla stock is showing downward pressure. Where is TSLA stock headed? Tesla Q2 Delivers 25% YoY SurgeTesla pre-released its second-quarter production and delivery figures on July 2, reporting 451,758 vehicles produced and 480,126 delivered — up 25% year-over-year and well above the roughly 406,000 Wall Street had expected. Model 3/Y deliveries totaled 467,762, with other models contributing an additional 12,364. The company also deployed 13.5 GWh of energy storage products during the quarter.
Tesla Tops $100B TTM Revenue, Stock SinksShares fell sharply following the report, extending to a 14.5% single-day decline on July 23 — Tesla’s largest single-day drop in over a year, erasing roughly $214.5 billion in market value. The selloff followed the worse-than-expected adjusted EPS result, along with company commentary on high capital expenditure growth, supply-chain bottlenecks and difficulties scaling up Optimus robot production.
The AI and Robotics PivotAnalyst Consensus & Recent ActionsThe stock carries a Buy rating with an average price forecast of $413.49. Recent analyst moves include:
UBS: Neutral (Lowers Target to $385.00) (July 23) JP Morgan: Neutral (Lowers Target to $445.00) (July 23) Morgan Stanley: Equal-Weight (Lowers Target to $400.00) (July 23) Tesla Shares Edge HigherTSLA Price Action: At the time of publication, Tesla shares are trading 0.43% higher at $321.05, according to data from Benzinga Pro.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Earlier this month, drastically improved second-quarter delivery numbers rekindled hope that electric vehicle (EV) maker Tesla (TSLA -1.39%) was back on track. The company's fiscal second-quarter results, reported after Wednesday's close, however, tainted those strong delivery figures. Here's a closer look.
Profitability pressure Yes, despite beating analysts' top-line expectations, Tesla's Q2 earnings fell short of estimates. The company turned $28.2 billion in revenue into a per-share profit of $0.33, versus analysts' consensus forecasts of $26.3 billion and $0.50, respectively.
Granted, the company is establishing or growing several different businesses with unpredictable developmental costs. These include solar panels and energy storage batteries, of course, but also robotaxis and, soon, humanoid robotics. That's why the earnings miss doesn't necessarily mean a great deal.
Image source: Getty Images.
The fact that its breadwinning electric vehicle business is showing signs of marketability strain, though, is a concern. Tesla might not be able to support the ongoing development of these other ventures from its EV operation as well as previously expected.
The graphic below tells the tale. Last quarter's total EV deliveries bounced back to 480,126 units. But these cars generated an average of $2,613 less revenue than they did just a quarter earlier. The production cost for each of the vehicles manufactured in Q2, meanwhile, grew by more than $6,000 apiece, and even ticked a bit higher based on last quarter's surging deliveries.
Data source: Tesla quarterly reports. Chart by author.
Connect the dots. Tesla is spending more to make less money on every car it manufactures or delivers.
Blame competition, mostly OK, it's not quite as alarming as last quarter's per-car metrics imply. The company was still bringing some of its capacity back online during this time, particularly in Europe, which can incur costs that don't result in immediate revenue. I'll want to see at least another quarter's worth of data before jumping to conclusions.
There's no denying, however, that Tesla has a pricing-power problem that can't simply be chalked up to selling fewer of its more expensive Model S and Model X EVs. Last quarter's price cuts coincide with the expanded availability of other electric vehicles... especially those made by China's BYD (BYDDY +1.47%), which delivered 557,090 battery-electric vehicles of its own in Q2, with many of them suddenly being shipped to Europe, where Tesla previously dominated. It would be naïve to believe the availability of these alternatives isn't taking a toll on the relative marketability -- and therefore pricing power -- of Tesla-made electric vehicles.
It's not like these rivals are suddenly going to back down either, now that they're finally finding their full stride. Look for the pricing pressure Tesla is now facing to persist.
Just tread lightly This doesn't necessarily mean Tesla's shares are un-ownable. As has been frequently pointed out, this stock is now being priced as much on its AI robotics potential as it is its electric vehicle business. This, of course, creates and maintains a premium.
Today's Change
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It also invites volatility, though, in addition to setting the stage for poor performance if the company's robotics ambitions don't pay off as well or as soon as hoped.
In other words, there's more than a little that could go wrong for this stock. Tread lightly.
Six weeks ago, Elon Musk was the richest person who had ever lived. On June 16, three days after SpaceX (NASDAQ:SPCX | SPCX Price Prediction) closed its June 12, 2026 initial public offering, SpaceX’s market capitalization hit an all-time high of $2.64 trillion, and Musk’s paper wealth peaked near $1.45 trillion. By the close on July 23, the Bloomberg Billionaires Index pegged him at roughly $738 billion. Somewhere between $650 billion and $700 billion of paper fortune has vaporized in about five weeks. He is, for the moment, still the wealthiest person on the planet by a wide margin, about $650 billion ahead of the next-richest person.
Two separate stocks are doing the damage at the same time. That is the story.
The SpaceX Round Trip SpaceX’s debut was the largest IPO in history, and the tape rewarded it accordingly: shares traded well above the offering price and pushed the rocket-and-satellite giant past a $2.6 trillion valuation within days. From the June 16 peak to the July 23 close, SPCX has fallen 41.41%, from $201.80 to $118.24. Market cap now sits at $895.24 billion. More than $1 trillion in market value has come off the top.
The catalysts arrived in sequence. A delayed Starship launch on July 16 hit the stock in extended trading. Post-IPO enthusiasm faded. A broader reappraisal of AI-linked valuations rolled through the tape. By July 21, SPCX had briefly traded below $120 a share, dipping under its IPO price after seven straight down sessions. Short sellers have booked, according to Reddit chatter cited in retail forums, $15.5 billion in profit on the slide.
Tesla’s Profit Air Pocket Tesla (NASDAQ:TSLA) provided the second leg of the drawdown. On July 22, after the close, Tesla reported Q2 revenue of $28.24 billion, beating estimates by 7.10%, alongside a record 480,126 deliveries. The problem sat below the top line. Non-GAAP EPS came in at $0.33 against a $0.5367 consensus, a 38.51% miss. Operating income collapsed 56.88% year-over-year to $398 million. Operating margin was 1.4%. Free cash flow swung to negative $1.09 billion as capex jumped 141.81% to $5.79 billion.
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The blowout in operating expense, up 47% YoY to $4.35 billion, reflects Tesla’s AI, robotaxi, Optimus and Dojo spend, plus stock-based compensation tied to Musk’s 2025 CEO Performance Award. Shares closed at $319.69 on July 23, off 14.52% on the day, 16.23% over the past month, and 28.91% year to date. Market cap now stands at $1.20 trillion.
What to Watch Two things are worth separating. The first is that Musk’s headline number is a mark-to-market figure, not a realized loss. His TSLA and SPCX stakes have not been sold; the wealth ticker moves with the tape. The second is that the underlying macro is calm. The VIX closed at 16.64 on July 22, inside its normal range. This is two idiosyncratic repricings landing on one balance sheet.
The signals to watch over the next quarter are specific. On Tesla: whether Q3 operating margin recovers off the 1.4% floor and whether capex guidance holds near the $25 billion analyst figure. On SpaceX: the lockup calendar (Reddit users have flagged a first major unlock bigger than the entire IPO float) and the next Starship attempt. If those go badly, the $650 billion number gets larger. If they go well, it shrinks fast. Musk’s fortune has always been leveraged to belief. The last five weeks are what happens when belief takes a breath.
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Item 1 of 2 A display of a Tesla Model 3 using Full Self-Driving Supervised on a highway in San Diego, California, U.S., April 15, 2026. Picture taken with a long exposure. REUTERS/Mike Blake//File Photo
[1/2]A display of a Tesla Model 3 using Full Self-Driving Supervised on a highway in San Diego, California, U.S., April 15, 2026. Picture taken with a long exposure. REUTERS/Mike Blake//File Photo Purchase Licensing Rights, opens new tab
CompaniesJuly 24 (Reuters) - The U.S. National Highway Traffic Safety Administration has denied a petition seeking a defect investigation into the emergency mechanical door release on about 180,000 Tesla (TSLA.O), opens new tab Model 3 vehicles.
NHTSA said the petition did not present evidence of a likely safety-related defect warranting an investigation and that the issue would be more appropriately addressed through an ongoing rulemaking process.
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The petition covered 179,701 model-year 2022 Tesla Model 3 vehicles and alleged the manual door release was difficult to locate after a crash if the vehicle lost power, increasing the risk of occupants getting trapped.
Tesla did not immediately respond to a request for comment.
Tesla's electronically operated door handles have faced scrutiny after several crashes in which occupants were reportedly unable to exit their vehicles after losing power, prompting broader calls for stricter federal safety standards governing emergency door releases.
The agency said it had identified one consumer complaint involving a 2022 Model 3 that alleged the mechanical door release was concealed and unlabeled after the vehicle lost electrical power in a front-impact crash. The petition cited the same vehicle.
NHTSA said the current federal safety rules governing vehicle door locks and latches do not address the labeling or location of emergency mechanical door releases.
The agency added that it has already begun a separate rulemaking process after granting approval to another petition that sought a new federal safety standard for more obvious emergency door-egress systems.
It said the broader rulemaking, rather than a defect investigation, was the appropriate way to address the issue.
Reporting by Akash Sriram in Bengaluru; Editing by Joyjeet Das and Shinjini Ganguli
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Though it left Elon Musk and other Tesla (NASDAQ: TSLA) stockholders poorer, TSLA shares’ latest plunge proved highly beneficial for one of the most prominent bears and contrarians in finance: the legendary ‘Big Short’ trader Michael Burry.
Specifically, the famous short trader revealed on Tuesday, June 30, that he made a bet against the electric vehicle (EV) company while it was trading at $416.22.
At press time on Friday, July 24, Tesla stock is changing hands at $319.69 after a 16.16% weekly drop and a 14.52% plummet following the July 22 earnings report. Overall, the EV maker is down 23.19% since the legendary short trader unveiled his position.
Tesla stock price one-month chart. Source: Google The exact scale of Burry’s profits – or whether they are realized or unrealized – however, remains unknown since the ‘Big Short’ investor refrained from revealing the size of his bearish bet.
Still, short sellers that targeted Tesla stock ahead of the company’s latest filing are estimated to have cumulatively raked in $4.1 billion, per a Bloomberg report published on July 23.
Why Tesla stock is crashing Elsewhere, TSLA shares’ latest drop is directly linked to a significant earnings miss during the second quarter (Q2) of 2026. Indeed, Elon Musk’s car company reported its earnings per share (EPS) at $0.33 while analysts were forecasting $0.51.
Additionally, while the firm beat expectations in terms of revenue – sales came in at $28.24 billion instead of $25.71 billion – and announced a recovery of its core business, its margins diminished, furthering the bearish attitude among investors.
Burry sees success on three out of four notable June 30 shorts Lastly, Michael Burry’s other three short positions unveiled on June 30 mostly appear to be paying off by press time on July 24.
Caterpillar (NYSE: CAT) stock fell 16% from $1,064.90 to $894.54 within the timeframe, and Applied Materials (NASDAQ: AMAT) is down 22.16% as its equity diminished in value from $723 to $562.80.
The final and arguably most controversial short position, however, remains a loser. Specifically, Michael Burry also made a bet against Nvidia (NASDAQ: NVDA) late last month, and NVDA stock rallied 4.33% from $200.09 to $208.76.
Featured image via Shutterstock
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A prototype of Tesla's Optimus robot. CFOTO/Future Publishing via Getty Images Elon Musk built Tesla into the world's most valuable carmaker. Now he's betting the company's future on a robot that walks on two legs.
Musk predicts its robot, Optimus, could become "the biggest product ever," with legions of the humanoid robots working in factories, doing household chores, and eventually building more robots. He even has a name for them in the plural: "Optimi."
But Tesla has yet to prove the robot can navigate the physical world or perform useful work autonomously, much less that it can be manufactured by the millions.
On Tesla's earnings call this week, Musk offered few details about Optimus and tempered expectations for how quickly production would increase. He said Tesla would begin producing its third-generation robot "soon" in Fremont in the San Francisco Bay Area.
Tesla is competing in an increasingly crowded humanoid market. Agility Robotics, which plans to go public, has deployed its Digit robot across nine customer facilities, while Figure AI has announced deployments in logistics and distribution centers this year. Sunday Robotics, 1X, and Weave Robotics are preparing to ship robots into homes this fall.
Guy Hoffman, an associate professor of mechanical and aerospace engineering at Cornell University who leads its human-robot collaboration lab, called humanoids a "fantasy product."
Autonomous cars took about 20 years to reach the market after the technology was first shown to work, he told Business Insider. Building humanoids is even harder, and a fully autonomous machine has yet to be developed.
"Humanoid robots are a very risky bet," Hoffman said. "I don't see the product having a viable future in the near term."
Tesla's first-generation Optimus production line in Fremont, California. Tesla Musk has never shied away from moonshot projects. But even he has acknowledged that Optimus is harder to develop than Tesla's Model X, Cybertruck, or gigafactories. If Tesla pulls it off, Musk believes Optimus could usher in "sustainable abundance," a future in which AI and robotics make human labor largely optional.
Tesla did not repond to a request for comment from Business Insider
Here's everything we know about Optimus so far:
From human to humanoidMusk introduced the "Tesla Bot" in 2021 with a person dancing in a robot costume.
Three years later, Optimus robots danced, served drinks, and spoke with guests at Tesla's "We, Robot" event. The robots walked on their own, but more complex movements, such as pouring drinks, handing out desserts, and interacting with attendees, were assisted by remote human operators.
Tesla hasn't yet revealed what the next version of Optimus will look like. All we know is that it stands nearly six feet tall and has a humanlike design, a form that one Silicon Valley investor dismissed to Business Insider as a "parlor trick". Musk has defended humanoids, arguing that robots must resemble people to perform the full range of human tasks.
Chinese companies, including Unitree and UBTech, accounted for about 90% of humanoid shipments last year, according to technology research firm Omdia. Musk has argued that Optimus will be much more sophisticated than its Chinese rivals, but has shared few details so far.
"Optimus is designed to have a lot of intelligence and to have the same electromechanical dexterity, if not higher, than a human," Musk said on a podcast earlier this year. "Unitree does not have that."
Where Optimus stands nowEven though Tesla has not publicly unveiled the next-generation Optimus, it released photos this week of the Fremont production line, where manufacturing is expected to begin soon. Musk previously said that Tesla was keeping the robot under wraps to prevent competitors from copying its design.
Tesla stopped producing the Model S and Model X in Fremont earlier this year to make room for an Optimus line designed to eventually produce a million robots a year. A second line under construction in Austin is planned to have an annual capacity of 10 million robots.
Tesla's first-generation Optimus production line in Fremont, California. Tesla The first bots will join Tesla's "Optimus Academy," where they will practice tasks and generate data used to improve the AI models that serve as their "brains." Musk has said that 10,000 to 30,000 robots will refine their real-world skills at the academy.
On the company's earnings call this week, AI chief Ashok Elluswamy said that the training could push the robots' capabilities to a "superhuman level."
Musk cautioned investors this week that production will ramp slowly because there is no established supply chain for many Optimus components.
Tesla has three big problems to solveTo make Optimus a reality, Musk says Tesla must solve three problems: intelligence, hands, and mass production.
First, the robot must learn to understand and move through the physical world. Musk believes Tesla's self-driving work gives it a head start because Optimus can use Tesla-designed AI chips and technology developed to help its cars interpret camera footage.
Tesla has adapted its driving simulator, a virtual environment used to train and test its self-driving technology, to train millions of virtual robots. But simulations cannot capture every real-world scenario, so Tesla also needs data from physical tasks. Tesla employees have recorded themselves performing factory jobs, for instance.
Hoffman, the Cornell professor, said Musk is underestimating how much harder humanoid robotics is than self-driving.
"It's like playing checkers versus doing nuclear physics," he said. Humanoids must balance on two legs without falling, he added, and today's AI models are still far from operating reliably in the physical world.
The second challenge is what Musk calls the "hands problem": replicating the human hand with motors, sensors, and software. A robot hand must combine strength, precision, and flexibility in a remarkably small space, making it exceptionally difficult to engineer.
Tesla has not unveiled the latest version of Optimus to prevent competitors from copying its design. Costfoto/NurPhoto via Getty Images On Tesla's earnings call this week, Musk said Optimus is being designed to have "human and then superhuman dexterity." Achieving that has required Tesla to develop custom motors, gears, and sensors.
The final challenge is scaling up manufacturing. Musk has warned that early production will be "agonizingly slow." But once Tesla starts producing a million robots a year — the timeline for which is still unclear — he estimates each Optimus could cost about $20,000 to $25,000 to produce.
How Optimus fits into Musk's AI empireMusk has increasingly talked about a "convergence" across his business empire, which is becoming more intertwined around AI.
Ahead of and during Tesla's earnings call this week, shareholders and analysts pressed Musk about a rumored merger with SpaceX. Musk wouldn't comment on the speculation, but highlighted the company's synergies, including the Robotaxi and AI businesses.
Musk has previously explained how Optimus could work with SpaceX's technology, which acquired xAI in February. Each robot would have enough computing power to perform some tasks independently, while xAI's Grok could coordinate larger groups, he said.
"Let's say you wanted to build a factory," Musk said earlier this year. "Grok could organize the Optimus robots, assign them tasks to build the factory floor to produce whatever you want."
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Rya is a senior reporter at Business Insider covering physical AI and robotics. She writes about factory automation, humanoid robots, and the race to collect the real-world data needed to bring AI into the physical world. She previously worked at The San Francisco Standard, where she reported on tech culture and autonomous vehicles. She has a bachelor’s degree in history and politics from Pomona College and a master’s in history from the University of Cambridge. Rya lives in San Francisco. Contact her at [email protected] or on Signal at rjetha.07. Use a personal email address, a nonwork WiFi network, and a nonwork device. Here's our guide to sharing information securely.
While Elon Musk’s two mega-cap public companies have not been doing particularly well in general in the 2026 stock market, the previous week of trading proved especially damaging, and, combined, SpaceX (NASDAQ: SPCX) and Tesla (NASDAQ: TSLA) wiped over $360 billion from their valuations.
Indeed, the rocket, social media, and artificial intelligence (AI) company started out strong following its initial public offering (IPO) in early June but then entered a downtrend that took it as low as $110.85 before recovering slightly to $118.24.
One-week price chart for Elon Musk’s SpaceX stock. Source: Google Within the last five sessions, SPCX shares fell 6.98%, and the company’s market capitalization crashed $116.83 billion from $1.67 trillion to $1.56 trillion.
The situation has arguably been even worse for the electric vehicle (EV) maker Tesla as its equity plummeted 16.18% within the same timeframe, meaning TSLA’s valuation plunged $243.61 billion from $1.5 trillion to $1.26 trillion.
One-week price chart for Elon Musk’s Tesla stock. Source: Google Why Tesla stock wiped $240 billion in a week To begin with, Elon Musk’s car company has been struggling since the year started, between dwindling vehicle deliveries and a shifting timeline for the autonomous ‘Cybercab’ and the humanoid ‘Optimus’ robot.
By Wednesday, July 22, the situation took another adverse turn as the firm’s quarterly earnings report disappointed investors, initiating a 14.52% daily crash to Tesla stock’s latest closing price of $319.69.
Specifically, though revenue came in higher than expected – at $28.24 billion instead of the expected $25.71 billion – and the firm’s core business grew relative to the same period in the previous year, compressed margins and an earnings per share (EPS) miss ensured the selloff.
EPS in particular demonstrates why TSLA shares plummeted, given that analysts were expecting $0.51 and the actual number came in at $0.33.
Why SpaceX stock wiped $116 billion in a week Elsewhere, SpaceX appears to be suffering from an overly ambitious initial valuation. Despite achieving less than $5 billion in revenue in the first quarter (Q1) of 2026 and suffering nearly a $2 billion loss, the company executed its IPO at a $1.77 trillion valuation and a $135 share price.
Broadcom (NASDAQ: AVGO) – a technology company with a comparable market capitalization – recorded roughly four times greater sales than Elon Musk’s space and AI firm within the same timeframe.
Saudi Aramco, an oil giant of a similar size, was profitable, unlike SpaceX, along with achieving significantly higher revenue.
Indeed, as Finbold reported earlier in the week, SPCX’s recent performance appears to back a case presented by Morningstar shortly before the IPO that the equity is headed under $100 and toward an estimated fair value close to $70.
Notably, however, SpaceX stock recorded a green day during the latest session and, despite the deep retracement, retains the confidence of Wall Street.
Shares of Tesla (TSLA -14.38%) plunged on Thursday after the Elon Musk-led tech titan reported earnings that fell short of investors' expectations.
Image source: The Motley Fool.
Heavy spending weighed on Tesla's profit margins Tesla's revenue rose 26% year over year to $28.2 billion in the second quarter. The gains were fueled by a 23% jump in automotive sales to $20.5 billion, a 13% rise in energy generation and storage revenue to $3.1 billion, and a 50% surge in services and other revenue to $4.6 billion.
But sales weren't the issue. Soaring costs and declining margins were.
The electric vehicle (EV) maker's operating margin fell to 1.4% from 4.1% in the prior-year quarter, driven by a 47% surge in operating expenses.
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All told, Tesla's adjusted net income declined 17% to $1.2 billion, or $0.33 per share. That was well below Wall Street's estimates, which had called for per-share profits of $0.54, according to Yahoo! Finance.
Worse still, Tesla's free cash flow turned negative as its capital expenditures outpaced its operating cash flow.
Project delays are getting tiresome Investors would likely have more patience if they were confident that this spending would produce strong returns. But as Musk ramps up Tesla's capital expenditures -- to more than $25 billion in 2026 alone -- he's failing to meet previously communicated timelines for key projects such as the company's Robotaxi service and Optimus robots.
Shareholders are growing increasingly frustrated. And many investors decided to sell their shares today.
Joe Tenebruso 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.
Tesla (TSLA -14.38%) investors got both halves of the company's story in one report on Wednesday, and they pulled in opposite directions. Revenue rose 26% year over year to $28.2 billion, powered by record second-quarter deliveries of 480,126 vehicles. The company even crossed $100 billion in trailing-12-month revenue for the first time.
But operating income fell 57% year over year to $398 million, leaving an operating margin of just 1.4%. A year ago, that figure was 4.1%.
The market didn't take it well. Shares of the electric carmaker sank about 14% Thursday as of this writing.
So is the business deteriorating? I don't think that's quite what the numbers show. What they show is a company deliberately converting nearly all of its operating profit into capacity for AI (artificial intelligence) and robotics, at a pace the income statement can no longer hide.
Image source: Tesla.
Tesla's problem wasn't the economics of selling cars. Gross margin slipped only modestly, to 16.8% (versus 17.2% in the year-ago quarter).
The bigger swing came below that line. Operating expenses jumped 47% year over year to $4.4 billion, driven by AI and other research and development projects, stock-based compensation (including expenses tied to CEO Elon Musk's 2025 performance award), and higher selling, general, and administrative costs. The company also absorbed lower regulatory credit revenue, lower average selling prices, and an energy warranty charge tied to a vendor's battery cell issue. Add it up, and the biggest second quarter for deliveries in Tesla's history produced less operating income than any quarter in the past year.
Net income held up better, falling 5% year over year to $1.1 billion.
And then there's the cash. Capital expenditures more than doubled from a year ago to $5.8 billion (a step-up of $3.3 billion from the first quarter alone). That pushed free cash flow to negative $1.1 billion, compared with a positive $146 million in the year-ago period, and Tesla's cash and investments dipped $1.2 billion during the quarter to $43.5 billion.
Of course, the balance sheet can absorb spending like this for now. But the direction has changed. Tesla used to fund its ambitions from profits, and it is now funding them from the vault.
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What the money is buying Tesla's quarterly update lists the projects. Cybercab, the company's purpose-built autonomous vehicle, began production at Gigafactory Texas during the quarter. Tesla decommissioned its Model S and X lines at the Fremont Factory to install the first production lines for Optimus, its humanoid robot. And the company more than doubled its AI training compute in Texas during the first half of 2026, continued work on a semiconductor fab in Austin, and kept ramping battery cell production and lithium refining.
Even more, the spending is set to accelerate. Chief financial officer Vaibhav Taneja has told investors to expect capital expenditures above $25 billion this year -- guidance he laid out back in April -- and he said on Wednesday's call that operating expenses will keep growing in 2026 and beyond.
To the company's credit, some of the payoff is already measurable. Robotaxi service is now live in seven U.S. metros, with unsupervised rides launched in Miami, Orlando, and Tampa in July. Full Self-Driving (Supervised) subscriptions climbed 56% year over year to 1.48 million. More than 55% of new North American deliveries included FSD subscriptions, a record attach rate. And services and other revenue grew 50% year over year, with a record $648 million of gross profit at a 14% margin.
But those returns are still small next to the bill.
Which brings up the stock. Even after Thursday's drop, Tesla commands a market capitalization of about $1.2 trillion, and shares trade at more than 300 times earnings. A valuation like that assumes the robotaxi and Optimus bets eventually produce enormous profits -- and the 1.4% operating margin means shareholders are funding those bets almost entirely out of what used to be the company's earnings.
If the build-out works, this stretch will likely look like the price of admission. If it doesn't, investors will have paid a premium valuation for a company that spent its margin.
Personally, I'll keep watching from the sidelines. What could change my mind is the operating margin turning back up while the spending continues -- evidence the core business can carry the build-out instead of being consumed by it.
Slipping 2.15% to 25,138, the Nasdaq Composite (^IXIC -2.15%) dropped sharply today, driven by a broad retreat in technology stocks following earnings reports. The S&P 500 (^GSPC -1.21%) lost 1.21% to 7,408 and the Dow Jones Industrial Average (^DJI -0.97%) fell 0.97% to 51,712.
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Gold prices fell 2.36% to $4,048.76 as of U.S. market close, and the 10-Year Treasury yield rose 0.04% to 4.67%, a 52-week high. Communication services and consumer cyclicals were the biggest losers today, while industrials and healthcare stocks showed strength.
Today's biggest movesAlphabet fell by 7%, and Tesla shares tumbled almost 15% following yesterday’s earnings. In contrast, Intel rose in after-hours trading following its Q2 results, which beat expectations. EquipmentShare.com rose 8%, extending gains after increasing its revenue guidance earlier this month.
What this means for investorsThe risk that the huge outlays on artificial intelligence (AI) infrastructure might not pay off pressured technology stocks today. Rising oil prices and high Treasury yields compounded the risk-off mood. WTI crude oil gained 5.8% to $91.84 a barrel on reports that Houthi militia had attacked tankers in the Red Sea, threatening an alternative supply route to the Strait of Hormuz, which remains largely closed.
Mounting concern over heavy AI capital expenditures hit both Alphabet and Tesla shares. Increased spending from both firms — without a clear indication of when investors will see returns — weighed on shares. Investors are shifting their stances on AI spending sprees, which could justify a more cautious stance on big tech firms.
Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Intel, and Tesla. The Motley Fool has a disclosure policy.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in TSLA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
SummaryTesla, Inc. and CEO Elon Musk appear to be deprioritizing the robotaxi initiative.Momentum in TSLA's robotaxi business has stalled, raising doubts about near-term commercialization.This shift may impact TSLA's growth narrative and valuation tied to autonomous driving.Investors should reassess expectations for robotaxi-driven upside in TSLA's investment thesis. Naypong/iStock via Getty Images
Elon Musk and Tesla, Inc. (TSLA) seem to be losing interest in its robotaxi business, as it appears to have stalled.
Ignoring His Previous Promises So much has changed in a year. A year ago, Elon Musk
4.64K Followers
Analyst’s Disclosure: I/we have a beneficial short position in the shares of TSLA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Tesla (TSLA -14.38%) stock sank nearly 15% in value this week after reporting quarterly earnings. Clearly, the market disliked what it heard from the company’s management team, including CEO Elon Musk. But there was some good news tucked into the data-packed announcement.
On the positive front, Tesla’s sales rose 26% year-over-year to $28.24 billion, beating most Wall Street estimates. Gross margins, however, slid from 19.2% in the first quarter to 16.3%, reflecting weaker pricing power and various one-time charges. Weaker margins hurt the company’s adjusted earnings per share, which came in at $0.33, below consensus estimates of roughly $0.50.
Most importantly, Tesla revealed surging capital expenditures, which shot higher 142% year-over-year to $5.8 billion. The company confirmed that capital expenditures for the year will exceed $25 billion to support its ongoing efforts to scale for AI compute, robotics, and chip manufacturing infrastructure. Surging capital expenditures weighed on free cash flow, which came in at negative $1.09 billion for the quarter.
Why did the market punish Tesla stock so harshly following earnings? The biggest concern deals with the pace and scale of its robotaxi division’s expansion.
Last year, Elon Musk told investors that its robotaxi service would expand at a "hyper-exponential rate". This quarter, however, Musk took a more cautious approach, warning of a slower-than-expected rollout. Analysts pushed back on the tone shift, with one pressing Musk on why the company’s robotaxi fleet was stuck “in the dozens as opposed to hundreds,” as previous guidance had predicted.
The market is clearly concerned about Tesla’s rising capital expenditures amid limited traction in growth markets like robotaxis. In other words, the market wants to see more from the company in exchange for higher spending.
Does Tesla’s robotaxi struggles portend trouble ahead for other EV stocks like Rivian (RIVN -4.04%) and Lucid Group (LCID -4.87%), both of which are expected to benefit from growth in the global robotaxi market? The short answer is yes, but the full answer is more complicated.
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Here’s how the news from Tesla impacts Rivian and Lucid GroupRobotaxis are set to become a major global market. Some experts believe that robotaxis could ultimately become a $5 trillion to $10 trillion market. Tesla is primed to take a huge chunk of this market. Its business is largely vertically integrated, with an ability to both manufacture the physical vehicles and create the software necessary for operating a robotaxi fleet at scale.
Rivian and Lucid have slightly different exposures. For now, these two businesses are positioned as supplier to the robotaxi market rather than direct competitors.
Popular ridesharing service Uber Technologies (UBER -2.02%), for example, is investing aggressively to scale its robotaxi fleet. But Uber doesn’t have any internal manufacturing capabilities. So, it must purchase vehicles from other companies.
Image source: Getty Images
Earlier this year, Uber agreed to purchase up to 50,000 Rivian R2 SUVs in a $1.25 billion deal. Uber also forged a $500 million deal with Lucid for 35,000 vehicles.
Tesla won’t be buying robotaxi vehicles directly from Rivian or Lucid given it can produce its own vehicles. But Tesla’s inability to scale it robotaxi fleet is an indicator that the robotaxi industry in general may be experiencing scaling issues. And while Rivian and Lucid have growth catalysts besides selling robotaxis, their respective deals with Uber show how lucrative that end market can be for both companies long term.
In short, investors should pump the brakes on expectations for Lucid and Rivian’s robotaxi growth potential. Robotaxis will still be a lucrative market long term. But judging by Tesla’s struggles, the next year or two may be more difficult for Rivian and Lucid when it comes to benefiting from robotaxi operators need for more fleet vehicles.
4:15pm: Nasdaq closes deep in the red US stocks ended sharply lower on Thursday, with the Nasdaq leading the losses as investors dumped technology shares after earnings from Tesla and Alphabet failed to ease concerns about rising spending.
The Nasdaq fell 2.2% to 25,138, while the S&P 500 dropped 1.2% to 7,408. The Dow Jones Industrial Average shed 507 points, or 1%, to close at 51,712.
Despite reporting strong revenue growth, Tesla and Alphabet came under heavy selling pressure after both companies warned that capital expenditures are set to climb, raising fresh questions about profitability and free cash flow. The disappointing market reaction weighed on the broader technology and communications sectors, dragging the Nasdaq to its steepest decline in weeks.
Adding to the pressure, oil prices surged toward the $100-a-barrel mark as escalating conflict in the Middle East fueled fears of supply disruptions. The jump in crude prices reignited inflation concerns, pushing Treasury yields to their highest levels of the year and further denting appetite for growth stocks.
Investors are increasingly worried that higher energy prices could complicate the Federal Reserve's path on interest rates, particularly if inflation proves more persistent than expected.
Attention now turns to Intel, which is set to report quarterly earnings after the closing bell, with investors looking for further clues on the health of the semiconductor industry after a bruising session for the broader tech sector.
3:40pm: Proactive news headlines Custom Health Holdings Inc (TSX:CHLT) initiated Buy-rated coverage from Stifel with a C$12 price target, with analysts highlighting significant upside driven by the company's medication management platform. 374Water Inc (NASDAQ:SCWO, FRA:8LL) said a US Army Corps of Engineers report independently validated its AirSCWO technology, demonstrating 99.9993% destruction and removal efficiency for PFAS during testing. Royalty Management Holding Corp (NASDAQ:RMCO) said its royalty partner ReElement Technologies secured new financing to expand operations, a move expected to increase royalty revenue under their existing agreement. Replenish Nutrients Holding Corp (CSE:ERTH, OTC:VVIVF, FRA:7KE) closed the $7.5 million equity portion of a previously announced $15 million strategic investment from SRC Agrominerals Sales, with the convertible debenture portion expected to close in August 2026. 2:30pm: Market movers Tesla Inc (NASDAQ:TSLA) shares fell despite record vehicle sales and stronger-than-expected revenue as investors focused on weaker profitability and future growth concerns. Alphabet Inc (NASDAQ:GOOG) shares dropped despite beating earnings and revenue forecasts as investors weighed concerns around valuation and expectations following the results. American Airlines Group Inc (NASDAQ:AAL, XETRA:A1G) shares fell despite beating second-quarter earnings expectations as the carrier warned that higher fuel costs could pressure third-quarter results. T-Mobile US Inc (NASDAQ:TMUS, XETRA:TM5) reported stronger-than-expected second-quarter earnings but saw shares decline after revenue narrowly missed Wall Street estimates. 374Water Inc (NASDAQ:SCWO, FRA:8LL) said a US Army Corps of Engineers report independently validated its AirSCWO technology, showing 99.9993% destruction and removal efficiency for PFAS during a demonstration. RTX Corp (NYSE:RTX, XETRA:5UR) shares climbed after the aerospace and defense company delivered better-than-expected second-quarter results and raised its full-year 2026 outlook. Southwest Airlines Co (NYSE:LUV) shares declined after stronger-than-expected second-quarter earnings were offset by a weaker-than-expected third-quarter outlook. International Business Machines Corp (NYSE:IBM) shares slipped after second-quarter revenue and earnings missed expectations and the company lowered its full-year revenue growth forecast. Replenish Nutrients Holding Corp (CSE:ERTH, OTC:VVIVF, FRA:7KE) closed a $7.5 million equity investment from SRC. 12:50pm: Oil prices surge after Houthi attacks Oil prices surged above US$100 a barrel on Thursday after Houthi rebels claimed attacks on two Saudi oil tankers in the Red Sea, raising fresh concerns over global energy supplies and rattling financial markets.
“Two of the world’s busiest shipping corridors are under threat in the same month, and markets are only just beginning to work out what that means," said Nigel Green, CEO of deVere Group.
"The timing is awkward for the Federal Reserve, which meets on July 29. Inflation had climbed for three straight months to 4.2% in May, its highest level in years, before cooling to 3.5% in June largely because gasoline prices fell nearly 10% during the brief ceasefire between the US and Iran.
"With that ceasefire now collapsed and oil back above $100, the drop which gave the Fed room to relax may already be reversing."
11:45am: Alphabet's spending rattles investors Alphabet Inc (NASDAQ:GOOG) shares fell more than 6% after investors looked past better-than-expected second-quarter earnings and focused on the company’s soaring AI spending.
The Google parent reported revenue of $119.8 billion and earnings per share of $9.11, beating Wall Street forecasts, while Google Cloud revenue jumped 82% year over year.
However, quarterly capital expenditure doubled to $44.9 billion, keeping Alphabet on pace for up to $190 billion in spending this year, while free cash flow dropped sharply. Investor sentiment was also weighed down by reports that Google delayed its Gemini 3.5 Pro AI model, although the company has disputed those claims.
11:00am: Tesla sinks on spending, profit Tesla Inc (NASDAQ:TSLA) shares were down about 14% after the electric vehicle maker reported second-quarter results that topped revenue expectations but missed on profit.
Revenue rose 26% year over year to $28.24 billion, while deliveries reached a record 480,126 vehicles, marking the first annual growth in two years. Services revenue climbed 50% and Full Self-Driving subscriptions increased 56%, with the company also reporting its largest order backlog since 2023.
However, adjusted earnings of $0.33 per share missed forecasts, while gross and operating margins weakened as lower vehicle prices, declining regulatory credit sales and rising costs weighed on profitability.
Heavy capital spending also pushed free cash flow into a deficit.
10am: Nasdaq leads losses as Tesla and Alphabet slide US stocks have extended yesterday's losses in early deals, with Tesla dropping over 10% to lead the Nasdaq down 1.8%.
The S&P 500 and Dow Jones are both off more than 0.9%.
Alphabet fell 6.6%, with other Mag 7 names dropping too, including Amazon and Meta both slipping more than 3%.
Biggest faller on the S&P is pest controller Rollins, down 12% after reporting weaker second-quarter revenue growth than expected.
Semis are also being sold again, with Microchip Technology, Qualcomm and Texas Instruments among the Nasdaq's biggest fallers.
Top of the S&P leaderboard is United Rentals after saying it will increase its spending on its fleet this year and raising full-year guidance.
9.20am: Record low US jobless claims US initial jobless claims have fallen to their lowest level since 1969.
New unemployment claims fall to 187K, down from 209K, while the market forecast was for a small rise to 210K.
"While seasonal factors may be impacting the headline number at the margins, the extremely low level of claims highlights a low layoff rate and the strength underlying the labor market," says Matthew Martin at Oxford Economics.
"In the wake of moderating jobless claims, continued claims fell a touch further in the week ended July 11, with the four-week moving average creeping lower.
"The decent pace of nonfarm payroll gains amid weak labor-supply conditions should translate into lower continued claims in the weeks ahead."
8.30am: Iran war has entered a more dangerous phase, RBC warns The Iran conflict has entered a "decidedly more dangerous phase", with Red Sea oil flows and critical infrastructure increasingly at risk, according to RBC Capital Markets.
Brent crude has topped $99.30 in recent minutes, but commodity strategist Helima Croft says these prices are a "lagging indicator of the extreme pressure building in the region".
Croft warns that the reported targeting of two Saudi tankers by Yemen's Houthis could cause a "material reduction" in Red Sea oil shipments and undermine the belief that "the market always finds a workaround".
Prices could surpass the 2022 peak of $128 a barrel or even reach the 2008 high of $146 in a full regional war, Croft warns.
She says alternative routes for tankers would significantly increase costs and extend journeys to Asia by around four weeks to roughly 54 days.
Iran's attacks on Kuwaiti desalination facilities are described as "especially concerning", with Kuwait relying on desalination for 90% of its drinking water.
Some Gulf cities could reportedly have only seven days of clean water if plants were disabled.
7.45am: Nasdaq and Dow set to extend losses Wall Street is set for a moderately lower open on Thursday after mixed results from Alphabet and Tesla, while a fresh surge in oil prices revived concerns about inflation and interest rates.
Futures for the Dow Jones, S&P 500 and Nasdaq were all down around 0.3%.
This would see losses extended from the day before, when the Nasdaq dropped 0.6% to 25,691, the S&P fell 0.1% to 7,499, and the Dow finished essentially flat, down six points at 52,219.
After the closing bell, Alphabet Inc (NASDAQ:GOOG) beat revenue and earnings forecasts, with cloud revenue surging 82%, but its shares fell in after-hours trading after the Google owner raised its planned capital expenditure to as much as $205 billion this year. Shares were down 4.1% in pre-market trading.
Tesla Inc (NASDAQ:TSLA) shares declined 6.2% after reporting its first quarter of negative free cash flow in more than two years as operating costs surged.
European markets were also lower, led by a 1.7% decline in Milan as semiconductor manufacturer STMicroelectronics (NYSE:STM) fell sharply after weaker second-quarter earnings and soft third-quarter guidance disappointed investors following a three-month rally.
In commodities, WTI crude has jumped 4.1% on Thursday morning to above $90.65 a barrel, its highest level in six weeks, as US Central Command confirmed another round of strikes against Iran.
"Strikes between the US and Iran show no sign of easing, and the Houthis said they targeted two oil tankers in the Red Sea yesterday, raising fears that the conflict is widening," said Henry Allen at Deutsche Bank.
This has raised fresh supply fears as Saudi Arabia has redirected oil exports to the Red Sea port of Yanbu, prompting "fresh concerns about a more prolonged stagflationary shock", with investors pricing in higher inflation and a more hawkish path for central banks.
Fed futures now indicate a 36% chance of an interest-rate increase next week. The European Central Bank is expected to leave rates unchanged when it announces its latest decision later today.
Before the bell, earnings are due from defence groups RTX and Lockheed Martin, telecoms names T-Mobile and Nokia, and other heavyweights including Thermo Fisher, TotalEnergies, Blackstone, Freeport-McMoRan, Comcast and Honeywell.
After the close, attention turns to Intel and SAP, along with gold miner Newmont.
The downtrend may continue. This is why Tesla is the Stock of the Day.
• How is TSLA stock doing now?
Markets are driven by supply and demand. When there are more shares for sale than buyers willing to purchase them, sellers are often forced to undercut one another by lowering their asking prices to attract buyers.
This forces the shares into a downtrend.
When a stock reaches a support level, the dynamic changes. There are large amounts of shares to be purchased. Downtrends end or pause when they reach support levels.
People who wish to sell can do so without forcing the price lower.
If a stock trades and stays below a support level, traders say the support has been broken. This can be a bearish dynamic.
It shows the investors and traders who created the support with their buy orders are gone. They have either finished or canceled their orders.
With these buyers out of the market, sellers will be forced again to undercut each other and offer their shares at discounts. This can create a new downtrend.
As you can see on the chart, the $372 level was support for Tesla in May and June. This support broke yesterday, and a large move lower followed this morning.
There was support around the $343 level. Today’s move broke this support, and the shares continue to trend lower.
If they keep dropping, there is a chance there is support around the $286 level. This level was support last July, and there tends to be support at levels that were support previously.
This happens because of remorseful or regretful sellers. Some of the people who sold at the support have regretted doing so ever since. A number of them vowed to buy their shares back at their selling price if they eventually could.
This means there could be support at this level. It could be where the selloff ends.
Market News and Data brought to you by Benzinga APIs
U.S. regulators will begin developing new requirements for automakers to ensure drivers and passengers can safely exit their vehicles. The new rule-making process, outlined in a regulatory filing and first reported by Bloomberg, follows a series of incidents, including fatal ones, in which people have become stuck inside cars with flush, electronically operated door handles like those found on Tesla vehicles.
The National Highway Traffic Safety Administration (NHTSA) announced the new rule-making in response to a petition that asked the agency to open a safety defect investigation into the emergency mechanical door release design on 2022 Tesla Model 3 vehicles. The petition argued that door release doesn’t comply with federal motor vehicle standards.
NHTSA denied taking the action that the petitioners wanted, saying that the issue would be best addressed through rulemaking rather than a defect investigation.
If the agency adopts new rules, all automakers will need to follow them. However, it’s important to note that “commencing” rulemaking doesn’t mean new ones will be developed, according to NHTSA.
The decision comes less than a year after NHTSA opened an investigation into Tesla’s door handles after receiving nine reports from owners who were unable to get into their cars, sometimes with children still inside. The probe followed Bloomberg’s own investigation into a series of incidents in which Tesla drivers and passengers became trapped inside their vehicles following a crash.
While Tesla vehicles do have manual door releases, they are located only inside the car. In an initial review by NHTSA, investigators found the handles may not work if the electronic door locks don’t receive enough voltage from the vehicle’s battery system.
Tesla designer Franz von Holzhausen said last year that the company was working on a redesign of its door handles. Rivian said last year it was changing the interior door handle design on its R2 SUV to put the manual release in a more visible location, closer to the electrically powered door handles.
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Kirsten Korosec is a reporter and editor who has covered the future of transportation from EVs and autonomous vehicles to urban air mobility and in-car tech for more than a decade. She is currently the transportation editor at TechCrunch and co-host of TechCrunch’s Equity podcast. She is also co-founder and co-host of the podcast, “The Autonocast.” She previously wrote for Fortune, The Verge, Bloomberg, MIT Technology Review and CBS Interactive.
You can contact or verify outreach from Kirsten by emailing [email protected] or via encrypted message at kkorosec.07 on Signal.
Tesla (TSLA -14.38%), the global electric-vehicle, battery storage, and autonomous driving platform, closed at $319.69, down 14.52%. Thursday's drop followed an earnings miss and heavier AI and robotics spending. Investors will continue watching margins with another focus on autonomous-driving guidance next.
Trading volume reached 114.2 million shares, coming in about 131% above its three-month average of 49.4 million shares.
Tesla IPO'd in 2010 and has grown 20,006% since going public.
How the markets moved todayThe S&P 500 (^GSPC -1.21%) fell 1.21% to 7,408.30, and the Nasdaq Composite (^IXIC -2.15%) dropped 2.15% to 25,138. Among electric vehicle manufacturing peers, Rivian Automotive (RIVN -4.04%) closed at $16.46, down 4.19%, and Lucid Group (LCID -5.01%) closed at $6.45, down 4.87%, reflecting pressure across EV names.
What this means for investorsTesla’s revenue soared in Q2, driven by a surge in EV unit volume. Deliveries jumped 25% year over year, and revenue gains came close to matching that. Yet profits dropped, and free cash flow turned negative as operating expenses and capital spending soared.
Analysts lowered their price targets for Tesla following the earnings miss, citing margin pressure and cautious guidance on autonomous driving.
The future direction of Tesla stock will depend on what investors prioritize. Competition in the EV market has put pricing pressure on Tesla, which it is offsetting with volume. But that additional revenue isn’t reaching the bottom line because of the company’s growth investments and expenses.
Those investments may pay off handsomely in the future, but investors may be waiting for proof before giving Tesla the benefit of the doubt.
Howard Smith has positions in Lucid Group, Rivian Automotive, and Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
Index Dow Jones -0,97 % na 51711,65 b. S&P 500 -1,21 % na 7408,3 b. Nasdaq Composite -2,15 % na 25137,69 b.
Obchodní den končí v USA v červeném. Široký index S&P 500 odepisuje 1,2 % pod tlakem poklesů v sektoru komunikačních služeb a zbytné spotřeby. V komunikační službách se negativní sentiment propsal do akcií Alphabet, které po kvartálních výsledcích odepisují 6,89 %. Rudá barva se prolila i do telekomunikačních služeb, kde reportoval T-Mobile US (- 10,75 %). Ten se chce v následujícím kvartálu zaměřit na vyšší výnosy z každého zákazníka a méně řešit přírůstky nových klientů. Vedení očekává slabší přírůstky a společnost se snaží převádět zákazníky na dražší tarify, což by mohlo vést k dočasnému úbytku zákazníků. Za minulý kvartál firma meziročně zvýšila čistý zisk o 5 % a díky silnému cash flow byl zvýšen celoroční výhled na USD 18,4 -18,8 mld. Zveřejněný zisk na akcii USD 2,99 překonal odhady trhu.
Nedařilo se ani aerolinkám. American Airlines Group (- 8,35 %) klesá kvůli slabšímu výhledu. Společnosti v uplynulém kvartálu významně rostla cena leteckého paliva. I když se zvýšené náklady povedlo částečně přesunout na zákazníka, tak trh negativně reaguje na zvýšený tlak na marže do budoucna. Management očekává v dalším kvartálu ztrátu až do výše USD 0,1 na akcii. V reportu za minulý kvartál dosáhl zisk na akcii na USD 0,15.
Kladně končí sektor průmyslu. GE Vernova posílila o 4,69 % a o 10,54 % posílil Lockheed Martin.
Z indexu Dow Jones posílila třetina titulů na čele s Honeywell Technologies (5,7 %).
Komoditní trhy se soustředí na černé zlato. Futures na ropu Brent se nyní obchodují těsně pod hranicí USD 100 a WTI při růstu o 5,3 % překonává cenovku USD 91,5.
Index S&P 500 -1,21 % na 7408,3 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Průmysl +1,8 % Komunikační služby -5,2 % Zdravotní péče +1,3 % Zbytná spotřeba -5,1 % Energie +0,6 % Nezbytná spotřeba -1,1 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna Lockheed Martin Corp (LMT) +11 % Tesla (TSLA) -15 % Allegion (ALLE) +10 % T-Mobile US (TMUS) -11 % United Rentals (URI) +10 % Rollins (ROL) -9,3 % Thermo Fisher Scientific (TMO) +8,7 % Dover Corp (DOV) -7,8 % Quest Diagnostics (DGX) +8,6 % Alphabet (GOOGL) -7,1 %
Marek Kameništiak
Fio banka, a.s.
Prohlášení
Tesla (TSLA) and Alphabet GOOGL shares led a broad market selloff on Thursday after investors reacted to higher artificial intelligence spending, sending the Nasdaq Composite down about 2.5% and the S&P 500 lower about 1.5%, while rising Middle East tensions pushed Brent crude close to $100 a barrel.
Tesla fell about 12% after reporting quarterly earnings that missed profit expectations despite stronger revenue, while Alphabet dropped roughly 7% after lifting its 2026 capital expenditure outlook to as much as $205 billion. The decline weighed on major indexes, with other large-cap technology stocks also trading lower.
Alphabet said it plans to increase spending on AI infrastructure as demand for computing capacity continues to grow. Separately, the company also faced a roughly $1 billion European Union fine tied to its search business, adding to investor concerns.
Oil prices extended recent gains after reports that Iran-backed Houthi forces attacked two Saudi oil tankers. Brent crude climbed more than 6% to nearly $100 per barrel, while U.S. benchmark West Texas Intermediate rose about 5%.
Higher energy prices also lifted Treasury yields as investors reassessed inflation and interest-rate expectations. The yield on the benchmark 10-year Treasury note rose to its highest level since January 2025, while traders increased expectations for potential Federal Reserve rate hikes over the coming months.
Key Takeaways Tesla did not confirm a SpaceX merger, but Musk said overlap between the companies is increasing.Tesla and SpaceX are collaborating on Terafab, Digital Optimus, AI chips and robotics.Starlink is set for Cybercab and other Tesla vehicles where available to support reliable connectivity. There has been much speculation on whether Elon Musk would eventually combine Tesla (TSLA - Free Report) and SpaceX (SPCX - Free Report) . The two companies share a founder, operate at the cutting edge of technology and have worked together across artificial intelligence, robotics and manufacturing.
On Tesla's second-quarter 2026 earnings call, when Musk was asked about a Tesla-SpaceX merger and whether it made strategic sense, he didn't dismiss the idea. Instead, he acknowledged that the two companies are becoming more closely intertwined.
Quoting him, “As you can tell from the many collaborations on so many fronts with SpaceX, there's more and more overlap.” He added that discussions about combining companies could not take place on an earnings call and would need to follow the "appropriate process."
While the response stopped well short of confirming any merger plans, it also didn't rule out the possibility. Musk, in fact, chose to emphasize the growing operational relationship between the two companies.
The Growing Overlap Between Tesla & SpaceXTesla and SpaceX are no longer simply two companies run by the same CEO. Their relationship has evolved into a strategic partnership spanning artificial intelligence, semiconductor manufacturing, robotics and connectivity.
Earlier this year, Tesla deepened its ties with SpaceX through an investment and a framework agreement, allowing the companies to expand collaboration on projects such as Terafab and Digital Optimus. The closer relationship was also reflected in Tesla's second-quarter results, where the company recorded a $1 billion mark-to-market gain on its SpaceX investment.
Developed jointly by Tesla and SpaceX, Terafab is a large-scale semiconductor manufacturing project that Musk described as critical to Tesla's future. The facility will help produce the AI chips needed to scale Optimus, Tesla's humanoid robot. Without sufficient chip supply, the company's long-term robotics ambitions could face constraints.
The companies are also working together on Digital Optimus. SpaceX's larger AI model helps assign tasks to the robot, highlighting how the two companies are increasingly sharing expertise in AI and computing rather than operating as completely separate technology businesses.
The collaboration extends beyond AI and robotics. Musk revealed that SpaceX's Starlink satellite internet service will be integrated into Tesla's Cybercab and eventually into all Tesla vehicles in markets where Starlink is available. He said reliable connectivity is essential for autonomous ride-hailing because cellular networks still have coverage gaps, even in densely populated regions such as Silicon Valley. Starlink would also ensure robotaxis remain connected while also supporting high-bandwidth services such as video streaming and other in-car entertainment.
Why Investors Keep Asking the QuestionThe growing collaboration between Tesla and SpaceX explains why merger speculation continues. The two companies are becoming increasingly intertwined across technologies that are central to their long-term strategies.
The similarities also extend beyond collaboration. Much of both companies' valuations today is driven not by their traditional businesses—selling electric vehicles in Tesla's case or launching rockets in SpaceX's—but by investor expectations around artificial intelligence and future technologies. Tesla is betting on autonomy, robotics and AI-driven manufacturing, while SpaceX is expanding beyond space transportation into satellite communications and AI-enabled infrastructure. As those ambitions converge, it's easy to see why investors continue to debate whether the partnership could eventually evolve into something bigger.
Musk also has a history of bringing companies within his broader ecosystem together through acquisitions and strategic restructurings— from Tesla's acquisition of SolarCity in 2016 to xAI's purchase of X and, more recently, SpaceX's acquisition of xAI.
The Bottom LineTesla's latest earnings call didn't confirm that a merger with SpaceX is in the works. But it did provide the clearest indication yet that the relationship between the two companies is becoming deeper and more strategic. Rather than focusing solely on merger speculation, investors should keep a close watch on how quickly Terafab ramps, whether Starlink integration expands beyond Cybercab, and if Tesla deepens its financial ties with SpaceX.
Tesla and SpaceX carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The silhouette of Elon Musk and Tesla logo are seen in this illustration taken June 11, 2026. REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights, opens new tab
SummaryCompaniesFrance cited safety concerns over Tesla FSD in its current formThe Netherlands provisionally approved FSD on Dutch roadsBelgium, Denmark, Estonia and Lithuania followed suit ahead of a possible EU vote this fallAMSTERDAM, July 23 (Reuters) - France opposes the use of Tesla's (TSLA.O), opens new tab Full Self-Driving (FSD) driver assistance software in its current form on roads in the European Union due to safety concerns, its transportation minister said.
The French stance on the FSD software is the first public rejection by an EU government of a Dutch-led initiative to approve the technology for use throughout Europe.
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In a video statement released on Wednesday, Philippe Tabarot pointed to worries over speeding and driver inattention.
"In France, we believe that, while this system brings a number of technological advances, the safety tradeoffs are not yet sufficient to justify authorisation in its current form," he said.
Tabarot added that other European countries shared France's concerns regarding the software, though he did not name them.
Reuters reported in June that Sweden may also oppose approval.
Tesla's FSD is a driver assistance system that can accelerate, brake, and steer a car, while its human driver remains ready to intervene.
The Netherlands' road authority RDW approved the technology for use on Dutch roads on a provisional basis in April, prompting Belgium, Denmark, Estonia and Lithuania to do the same in advance of a possible bloc-wide vote on the plan this fall.
The RDW could not immediately be reached for comment on Thursday.
FSD software is seen as a selling point and revenue-generator for Tesla, whose European registrations are gradually recovering following a slump last year.
Responding to Tabarot's remarks in a statement on X, Tesla CEO Elon Musk wrote that "delaying the approval of FSD in France will cost lives".
Tabarot said France is continuing technical discussions with the Netherlands and other EU countries over the technology.
Reporting by Toby Sterling; Editing by Joe Bavier
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Tesla delivered strong Q2 vehicle growth and increased FSD subscriptions, but profitability suffered from lower average selling prices and higher expenses. TSLA's optionality in FSD, Cybercab, Semi, and Optimus offers compelling long-term growth potential, yet these ventures remain highly capital-intensive and uncertain in timing and scale. Despite robust prospects, TSLA's current valuation—200x earnings and 90x forward EBITDA—remains excessive relative to achievable near-term fundamentals and optionality realization.
Shares in the YieldMax TSLA Option Income Strategy ETF (TSLY -13.43%) declined by 14.2% at 11:30 am today. The decline correlated with the fall in Tesla (TSLA -13.97%) shares following the release of its second-quarter earnings report. Here's the lowdown.
Why YieldMax Tesla Option Income Strategy ETF declined As the name suggests, the ETF uses option strategies to deliver returns to investors based on the performance of Tesla's stock. It gains long exposure to the stock by buying call options and selling put options – both positions reward bullishness. At the same time, the ETF's managers also sell call options, which "generally have a strike price that is approximately 0%-15% above the then-current share price of the Underlying Security." This is a bearish strategy that rewards the ETF as long as the price of the stock doesn't rise significantly.
NYSEMKT: TSLYTidal Trust II - YieldMax Tsla Option Income Strategy ETF
Today's Change
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-13.43
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-3.38
Current Price
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21.77
The combination of strategies gives the ETF significant income generation in long periods of relatively low volatility for Tesla stock, particularly when Tesla stock is gently rising, but can underperform Tesla stock in sharply rising periods due to selling call options.
It does not do well when the stock falls sharply, and that's what happened today.
It would be remiss to discuss the ETF without mentioning why Tesla stock fell today. Simply put, Tesla's gross and profit margins came in lower than expected due to rising costs (both for goods sold and operating expenses). More importantly, CEO Elon Musk's commentary on the robotaxi rollout made it abundantly clear that it will be a measured, safety-first rollout that is unlikely to scale massively until the latest version of full self-driving (FSD) software, v15, is validated and released.
Image source: The Motley Fool.
That dose of reality is likely causing previously overly optimistic investors to sell the stock. That's the bad news, but the good news is it might reset expectations for the rollout and ultimately allow long-term bulls to buy stock cheaper.
Lee Samaha 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.
Optimus moved into production this quarter at Tesla’s Fremont, California, factory, where the humanoid robot learns from what it sees instead of code written to instruct it.
“You’ve probably seen lots of impressive demonstrations of robots on the internet,” CEO Elon Musk said Wednesday (July 22) on the company’s second-quarter earnings call. “Those demonstrations are pre-programmed or remote controlled. There is no humanoid robot that is actually able to do generalized tasks. Optimus will be the first one that is capable of doing that.”
That scalability is the point. Programming a robot for every possible task isn’t feasible, but learning by observation is virtually limitless: factory floor footage runs continuously, and video of humans performing everyday tasks already exists at internet scale. Like a new employee, Optimus practices, fails, learns and improves, the company says.
“Just like Full Self-Driving, Tesla’s driver-assistance software, we have access to a broad fleet of humans giving us data from all of the workers at our factory,” said Ashok Elluswamy, Tesla’s vice president of AI. “Optimus can learn quite a bit from observing them perform their tasks.”
Optimus Has No Existing Supply Chain, So Tesla Is Building One Getting Optimus built at scale is a separate challenge. Cars draw on decades of existing suppliers for parts like glass and body panels; Optimus has no such precedent. Every part is new and every supplier had to be found from scratch or brought in-house.
“The difficulty of scaling the production ramp is proportionate to the newness of the parts in the robot,” Musk said. “With Optimus, there is no supply chain.”
Karen Cattan, Tesla’s VP of supply chain, said the company builds components itself when outside partners fall short. “In certain cases where we don’t find a great partner, we’ve never hesitated from insourcing it,” she said. Tesla is also lining up outside suppliers for chips and batteries. Samsung is building a manufacturing facility in Texas. Micron, one of the world’s largest memory chip makers, has given Tesla an allocation at a time when supply is tight. Panasonic has invested in battery cell production to support the ramp.
Tesla has also placed equipment orders for a chip development facility in Austin that puts design, testing and production under one roof, compressing a process that typically takes months into weeks. No such facility exists anywhere else on earth, Musk said. “It’s going to be the hardest product to scale manufacturing that we’ve ever made at Tesla,” he said.
Robotaxi Fleet Has Driven 380,000 Miles Without a Notable Incident While Optimus is a longer-term bet, Tesla’s robotaxi program, fully driverless vehicles that pick up and drop off passengers with no one behind the wheel, is proving the same technology in the real world.
Tesla has logged more than 380,000 miles of unsupervised robotaxi driving across seven U.S. markets with zero notable incidents, Elluswamy said. The fleet is growing at double-digit rates week over week and Tesla expects that pace to hold through year end.
The program started roughly a year ago in Austin with safety monitors in the car. By late last year it was running with no one on board, and it has since expanded across Florida, Texas and the Bay Area. “Robotaxi growth so far has been literally exponential while keeping an impeccable safety record,” Elluswamy said.
Both robotaxis and Optimus run on the same principle: a machine that learns from what it sees, improves through repetition and eventually outperforms a system following a fixed script. Robotaxis are proving the model works. Optimus is the next test of it.
What Else Stood Out Full Self-Driving, Tesla’s software that handles steering, acceleration and braking without human input, now has nearly 1.5 million paying customers globally. In North America, 55% of Q2 North American deliveries had FSD enabled at purchase. Tesla is adding Starlink satellite connectivity to the Cybercabs. Tesla ended Q2 with its biggest order backlog since 2023. Model Y set sales records in the Netherlands, Australia and New Zealand, CFO Vaibhav Taneja said. The Tesla Semi, the company’s electric freight truck, will get autonomous driving capability by end of this year or early next. Optimus will eventually have superhuman dexterity, finer motor control than a human hand, Musk said. The human hand is more remarkable the closer you study it, he added, and Optimus is designed to match and then exceed it. Second-Quarter Results and Future Outlook Tesla reported record second-quarter deliveries with sequential growth of 60% in the Americas, 27% in Asia Pacific and 12% in Europe, the Middle East and Africa.
Automotive gross margins, excluding regulatory credits, fell from 19.2% to 16.3%, driven by the non-recurrence of a $230 million warranty benefit and tariff relief from Q1. Adjusted for those items, margins were approximately flat.
Service margins, which include used cars, Supercharging, service centers and insurance, hit an all-time high of 14.1%, up from 9.2%. Free cash flow turned negative as capital expenditure more than doubled from the previous quarter, and Tesla now expects full-year capital expenditure above $25 billion.
ToplineElon Musk’s fortune was cut by more than $18 billion on Thursday amid the worst intraday selloff in Tesla shares in more than a year, following the automaker’s earnings report that disappointed Wall Street, as analysts called for Musk’s firm to bring “tangible” results for its robotics and robotaxi businesses.
The automaker reported earnings that disappointed Wall Street, with plans to spend billions more on AI.
Getty Images
Key FactsShares of Tesla plunged 14.1% as of Thursday afternoon, pacing what would be the largest single-day decline for the stock since June 5, 2025 (14.2%).
That drop in Tesla’s share price lowered Musk’s net worth by $18.6 billion to $731.7 billion, even as he remains the world’s richest person ahead of Google co-founder Larry Page ($263.8 billion) and Amazon’s Jeff Bezos ($245.4 billion).
Tesla's slump follows the company’s quarterly earnings report on Wednesday, in which the automaker reported $28.2 billion in revenue, beating consensus analyst estimates of $27.2 billion, according to FactSet, while posting earnings that fell well below projections of 55 cents at 33 cents.
Chief financial officer Vaibhav Taneja, during Tesla’s earnings call, reiterated plans for the automaker to spend $25 billion this year and more in the coming years.
That brought some criticism from Wall Street: Morgan Stanley analysts said in a note that while Tesla’s spending is a “necessary investment,” the company will need to present “tangible” milestones for its robotaxi and Optimus programs.
Canaccord Genuity analysts echoed that sentiment, writing the firm wanted to see meaningful robotaxi deployments over the next six months as Tesla ramped up its AI strategy.
surprising factCanaccord analysts noted they hoped to see momentum around a merger between Tesla and SpaceX. In Tesla’s earnings call, Musk deflected a question about a possible tie-up following months of speculation: “We can’t talk about, you know, combining companies and that kind of thing on an earnings call—it has got to be done with the appropriate process.” Musk did note there is “more and more overlap” between his two firms, pointing to Starlink’s integration in Cybertrucks, and TeraFab, a proposed AI chip manufacturing venture between Tesla, SpaceX and the former xAI, which is now a SpaceX subsidiary.
what to watch forSpaceX will launch its 13th test flight of the Starship rocket on Thursday, its first since the rocket maker’s initial public offering last month. An earlier launch scheduled for last week was aborted after Musk said some of the rocket’s engines failed to start. That pushed SpaceX shares down by more than 4%, lowering Musk’s net worth by more than $45 billion.
contraSpaceX shares were largely flat on the day, down only 0.1% as of around 1:45 p.m. EDT, having little impact on Musk’s fortune.
key backgroudnMusk’s fortune has fallen more than $700 billion from its peak, which came shortly after SpaceX’s IPO. A trading debut for his SpaceX made him a trillionaire, and surging shares in the rocket maker boosted him to a high of $1.45 trillion before a weekslong selloff that has since pushed his net worth below pre-IPO levels. The latest dip in Tesla shares followed speculation from shareholders about whether Musk would reveal updates for Tesla’s Optimus robotics or robotaxi plans, with submitted questions ahead of the automaker’s earnings asking why its robotaxi business had been “stalled.” Another question posed: “What is keeping Tesla back from accomplishing these short-term goals that they’ve set for themselves?”
further readingForbesMusk Says Tesla And SpaceX ‘Can’t Talk About’ Merging On Earnings Call—But Here’s What He Did SayBy Ty Roush
Hatem Dhiab shares his biggest takeaways from Tesla's (TSLA) earnings, including concerns over CapEx climbing toward $25 billion for 2026. He argues that some investors are shifting their attention to SpaceX (SPCX), another Elon Musk-led company with a stock struggling to find its footing.
Tesla Inc. (NASDAQ:TSLA) shares are down sharply after the company’s earnings update, putting the stock on track for its worst session in more than a year.
Tesla was down 14% in the session, a move that would mark its worst day since June 2025.
Tesla’s Q2 Earnings MissThe decline follows a disappointing second-quarter earnings report. On Thursday, Tesla reported an adjusted earnings per share of 33 cents, falling short of the 50 cents expected by analysts.
Former Tesla president Jon McNeill noted that these discounts, combined with a significant drop in regulatory credit revenue, have squeezed margins.
Analysts Adjust Tesla Price TargetsTechnical Analysis
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