Tesla stock has dropped since the company's July 22 earnings report, even after a quarter of record deliveries and revenue. Investors are focused on the $25 billion in capital spending Tesla has budgeted for this year and the negative free cash flow that came with it.
Tesla shares have fallen since the company's July 22 earnings report, even though the quarter produced record vehicle deliveries and record revenue, including $100 billion in revenue over the trailing 12 months. The slide traces back to one figure: $25 billion, the capital spending Tesla has budgeted for this year.
That amount is almost triple the $8.5 billion it spent last year. Its Q2 capital spending alone reached $5.8 billion, up about 142% from the $2.4 billion it spent in Q2 2025. That outlay pushed free cash flow to negative $1.1 billion for the quarter, and cash and investments fell $1.2 billion.
Tesla stock now trades at $298.32, down $9.12, or 2.97%, on the day. That price sits inside a 52-week range of $297.38 to $498.83.
At current prices, Tesla trades at 171.1 times its projected earnings for the next 12 months, by far the richest valuation among the "Magnificent Seven" stocks. Apple, the next-most-expensive, trades at 38.8 times its projected earnings. Motley Fool analyst Stefon Walters argues Tesla's real selling point is the promise of its robotaxi network and humanoid robots, not its cars, but says there hasn't been enough progress on either to justify how expensive the stock is.
Investors are still deciding whether that $25 billion buys progress toward those ambitions or just more spending.
Source: Fool
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