Tesla shares tumbled after second-quarter earnings as CEO Elon Musk urged patience on robotaxis and Optimus instead of the concrete AI updates Wall Street wanted. Record revenue and deliveries were overshadowed by an earnings miss, thinner margins and a jump in spending. At least seven firms cut their price targets.
Tesla stock fell more than 10% Thursday morning to a new low for 2026, after a second-quarter earnings call in which Elon Musk preached caution and patience on robotaxis, Optimus robots and Full Self-Driving software.
Investors had wanted firm updates on those AI projects. Instead, Musk and his team told them to wait, even replacing an earlier plan to begin Optimus production by late July or August with a more general timeframe.
Record revenue, but an earnings miss
Revenue reached $28.24 billion, up 26% from a year earlier. That came in above analysts' consensus estimate. The core automotive segment generated $20.52 billion, up 23%, while Tesla delivered a record 480,126 vehicles, a 25% jump on the year.
Profit told a different story. Adjusted earnings came in at 33 cents per share, well below the 51 cents analysts polled by LSEG expected. Slimmer margins in the electric vehicle business dampened the excitement from those record deliveries, turning attention to the spending behind them.
Spending ramps as robotaxi and Optimus take center stage
Tesla's capital expenditures more than doubled from the prior quarter to $5.8 billion, and management expects spending to exceed $25 billion this year. That $5.8 billion still came in below the $6.4 billion analysts had forecast, according to FactSet, and the outlays led to a cash burn.
Musk cast the decision to scale robotaxi slowly as a way to avoid accidents and public backlash; as he put it, per Investor's Business Daily: "We don't want to injure anyone." This month Tesla began robotaxi operations in Miami, Orlando and Tampa, Florida, though each city still runs only a limited number of vehicles. Executives said the company's autonomous cabs have traveled 380,000 unsupervised miles.
Analysts trim their targets
At least seven Wall Street firms cut their price targets on Tesla Thursday morning. Morgan Stanley's Andrew Percoco lowered his target to $400 from $417, framing the capex cycle as a necessary investment in autonomy and robotics. JPMorgan cut its target to $445 from $475 while keeping a neutral rating, and Mizuho lowered its to $450 from $480.
Shares of Tesla are now down about 27% this year, their lowest level since Sept. 2.
Sources: Investor's Business Daily, CNBC, FreightWaves
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