TSLA: Tesla Stock Dumps as Earnings Show 20% Slide, Revenue Tops Estimates

Mixed bag of earnings updates sent Tesla shares lower. Musk couldn’t inspire confidence despite ambitious plans.

📉 Profits Hit the Brakes

• Tesla shares TSLA slid about 5% in after-hours trading after the EV giant delivered a classic mixed bag.
• Revenue beat expectations at $28.2 billion, but earnings per share came in at just 33 cents, well below Wall Street forecasts of roughly 52–55 cents.
• Net profit totaled $1.1 billion, down about 5% from a year earlier. Operating profit fell even harder to $398 million from $923 million, while automotive margins remained under pressure despite Tesla delivering a record 480,000 vehicles, up 25% year over year.
• Translation: selling more cars is nice. Making less money on each one? Investors tend to notice that part first.

🤖 AI Dreams Aren't Cheap

• Tesla's biggest expense isn't today's business — it's tomorrow's. Capital spending surged 142% from a year ago to $5.8 billion as the company pours cash into factories, AI infrastructure and next-generation vehicles.
• Elon Musk said Tesla still plans to spend around $25 billion this year building its AI future. That includes ramping production of the Cybercab in Texas while keeping the Tesla Semi on track for a 2026 production launch.
• Investors generally don't mind big spending — provided it eventually leads to bigger profits. Right now, they're still waiting for that second part.

🚀 SpaceX & Tesla = Spesla?

• One of the most anticipated questions on the earnings call wasn't about cars — it was about SpaceX.
• Musk acknowledged significant overlap between the two companies but quickly poured cold water on speculation, saying an earnings call wasn't the place to discuss any merger ideas.
• He did point to growing collaboration, including plans to integrate Grok, SpaceX's AI assistant, and Starlink satellite internet into Tesla vehicles. Synergies? Yes. Merger announcement? Not today.
• Tesla remains a stock priced more on what it could become than what it earns today. Wednesday's report didn't give investors much fresh reason to pay tomorrow's prices for today's profits.