Investors are closely watching the upcoming second-quarter earnings report from Tesla Motors, scheduled for release after the market closes on July 22, to see if it can spark a rally in related exchange-traded products.
Ahead of the report, Tesla's stock has been under pressure, declining nearly 12% year-to-date and currently trading below all its key moving averages, indicating technical weakness. However, institutional expectations for the second quarter are not pessimistic: the market anticipates earnings per share of $0.52 and revenue of approximately $25.81 billion, both showing growth compared to the same period last year. The previously announced second-quarter deliveries of 480,126 vehicles, significantly exceeding Wall Street's estimate of around 406,000 and marking a 25% year-over-year increase, have laid a foundation for the results.
For short-term traders looking to capitalize on potential earnings-driven moves, leveraged and inverse ETFs offer strategic tools. The Direxion Daily TSLA Bull 2X Shares (TSLL) aims to deliver twice the daily performance of Tesla, while the Direxion Daily TSLA Bear 1X Shares (TSLS) tracks the inverse daily performance. Additionally, the Simplify Volt Tesla Revolution ETF (TESL) employs an active management strategy, allocating at least 80% of its assets to Tesla-related securities, including stocks, swap contracts, and call options.
Market focus extends beyond the core automotive business. Morningstar analyst Seth Goldstein noted that as Tesla embarks on a significant capital expenditure cycle to build AI infrastructure, the free cash flow metric will be a key area of scrutiny. Furthermore, the expansion plans for Robotaxi, progress on the Optimus humanoid robot, and changes in gross margins could all serve as critical variables driving volatility in related ETFs following the earnings release.
Wall Street opinions on Tesla are notably divided. Data from TipRanks shows the stock holds a consensus "Hold" rating, with an average price target of $399.71, implying only about 1.4% upside potential. However, some analysts have raised their price targets to $500, believing that a potential Tesla-SpaceX merger and the long-term value of the AI business will be the core drivers for the stock price.
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