Movement Alert|Tesla Motors Falls 4.12% in Pre-Market Trading, Q2 Earnings Miss Expectations by 34% as AI Spending Drains Cash Flow

Market Focus07-23

On July 23, Tesla Motors fell 4.12% in pre-market trading, trading at $356.18/share, with turnover of $15.02 million.

Tesla reported Q2 adjusted EPS of $0.33, missing the consensus estimate of $0.50 by 34%, while revenue of $282.4 billion beat expectations by over 7% with 26% year-over-year growth. However, gross margin declined to 16.3%, far below the 19.4% market expectation. Operating profit plunged 57% year-over-year to just $3.98 billion, less than one-third of estimates. Free cash flow turned negative for the first time in two years at -$10.9 billion, as capital expenditure surged 142% to $57.9 billion driven by AI infrastructure and robotics investments.

CEO Elon Musk characterized the spending as the fastest industrial scale-up since World War II, with full-year CapEx expected to exceed $250 billion. Multiple analysts cut target prices following results, including JPMorgan to $445, Morgan Stanley to $400, TD Cowen to $460, and Canaccord Genuity to $410.

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