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Tesla (TSLA) fell more than 6% in premarket trading after enthusiasm over record revenue and deliveries for its second quarter was offset by margin and cash flow pressures. Analysts are busy dissecting how investors should view the EV stock after the update.
JPMorgan analyst Rajat Gupta
"Net-net, we believe TSLA shares are likely to remain range-bound near-term as forward estimate revisions continue to find a bottom as investments ramp, though we continue to see downside support as the broader robotaxi rollout nears, Cybercab production ramps, and automotive volume shows signs of sustained re-acceleration, keeping the eventual EPS inflection and SoTP unlock potential intact."
Morgan Stanley analyst Andrew Percoco
"We view Tesla's accelerating capex cycle as a necessary investment to secure leadership in autonomy & robotics. However, these investments push FCF further into negative territory, increasing focus on tangible Robotaxi & Optimus milestones. We lower our PT to $400, reflecting elevated cash burn."
Needham analyst Chris Pierce
"The longer-term autonomy thesis took a step forward, with the promise of autonomous driving winning consumer mindshare at accelerating rates, looking at FSD uptake against reiterated Cybercab and Optimus production timelines. Auto demand has perked up against temporarily elevated gas prices, but margins missed consensus estimates despite the unit beat, and we see further demand headwinds ahead as the Model Y faces its first legitimate competition from RIVN's R2 vehicle, with the Energy business surprising to the downside as well, putting more pressure on TSLA's legacy business lines ahead of increased capex spending to fund future products with still unknown payoffs."
Seeking Alpha analyst Sandeep G. Rao
"While Tesla's quarterly deliveries of 480,126 vehicles represent a 25% year-over-year jump, this was achieved via steep price cuts and consumer incentives that dragged automotive gross margins (excluding regulatory credits) down to 16.3%. Federal tax policy shifts have now reduced the fuel-economy demands that used to be a point in favor of buying EVs over ICE-powered vehicles. Simultaneously, capital expenditure more than doubled year-over-year to $5.79 billion as the company enters what Elon Musk called its "largest investment period." Full-year 2026 capex guidance is now locked in to exceed $25 billion. Tesla is aggressively building out its Cortex 2 supercomputer cluster, expanding its Terafab chip-research joint venture with SpaceX, and ramping up Robotaxi/Optimus production lines… All told, this is a massive shift: Tesla is progressively less of a carmaker and more of an AI conglomerate with a car division. Investors are exhibiting classic AI skepticism—similar to what has tinged most other stocks (such as ASML and TSMC) this season—regarding the high-capex pivot wherein AI payoffs are pushed out multiple years into the future while the core business' margins are being squeezed. Tesla's stock valuation is likely going to be discounted further in the coming sessions."
Dhierin Bechai, Investing Group Leader for The Aerospace Forum.
"Tesla’s total revenues showed solid growth in all parts of the business. However, none of that translated to adjusted EBITDA growth as average sales prices declined, gross margins fell, and operating expenses increased sharply, leading to a 4% decline in EBITDA. FSD subscriptions reached nearly 1.5 million, with regulatory approvals in Europe gaining traction. The company is making more concrete steps on the Optimus humanoid robot with production lines in Fremont being configured for production. However, large scale production and commercial rollout still seem far off… Interesting to note is that the company seemingly did not highlight macro weakness as a reason for the lower profitability, as well as lower sales prices and lower tariffs,tariffs which actually supported a reduction in the average cost per vehicle. All in all, Tesla remains very much focused on AI, semiconductors, and Optimus, and that affects the financial results. That, however, also aligns with the company positioning itself more and more as a technology company rather than a car maker."
