Tesla's earnings are coming on Wednesday. Investors might not care about bottom-line results, but they will surely care about what CEO Elon Musk has to say.
For the second quarter, Wall Street is looking for earnings per share of about 54 cents from sales of $27.4 billion, according to FactSet. A year ago, Tesla reported earnings per share of 40 cents from sales of $22.5 billion.
Revenue and earnings are expected to be up with rising vehicle sales. Tesla sold about 480,000 vehicles in the second quarter, up 25% year over year. A few factors helped, including high oil prices, Tesla buyer incentives, and retrenchment from traditional auto makers, which are less focused on EVs after the expiration of the $7,500 federal EV purchase tax credit in September.
Growth is great. And an earnings beat would be nice. Still, cars just aren't what's driving Tesla stock these days.
"Strong auto and energy deliveries improve near-term fundamentals, but we continue to believe Robotaxi and Optimus will be the primary drivers for the stock," wrote Morgan Stanley analyst Andrew Percoco in a preview report. "We expect constructive updates across both, though likely not enough to drive a decisive [change in valuation]."
The company launched an AI-trained robo-taxi service in Austin, Texas in June 2025. Investors will be looking to see how fast Musk plans to expand the service. Investors will also want to see the third version of Tesla's humanoid robot, Optimus, which Musk believes will be one of the biggest products ever.
Robots and robo-taxis aren't contributing materially to earnings yet. Tesla's AI-trained driver assistance product, Full Self Driving, has 1.3 million subscribers. Investors would like to see that number moving up.
Tesla stock rose 1.3% to $374.43 ahead of the open Tuesday, and is down 18% in 2026 through Monday's close.
Percoco rates shares Hold. He has a $417 price target for the stock. His sentiments have been echoed across the Street.
Second quarter deliveries "vastly exceeded expectations, while 13.5 gigawatt-hours of energy storage sales recovered nicely from [the first quarter]," wrote RBC analyst Tom Narayan in a preview report. He expects gross profit margins to be better than expected, but also said that the stock is being valued on robo-taxi and robot developments.
Narayan rates shares Buy. His price target is $500. He recently raised his price target by $25 a share to reflect a potential acquisition with SpaceX.
Musk isn't likely to reflect on a SpaceX merger on Tesla's earnings call. Still, many analysts think it can happen. SpaceX is also all about AI, like Tesla. Musk's rocket company merged with xAI in February and plans to put AI data centers in orbit.
SpaceX and Tesla are also close. Musk, of course, runs both companies. But the pair are also working on semiconductor manufacturing and AI applications that can run on the computers of idle Tesla vehicles.
A merger is likely 12 to 18 months down the road -- at the earliest. Robo-taxis won't be material to earnings until 2027 -- at the earliest. Investors aren't sure when robots will contribute.
All that makes quarterly earnings less important. How the stock will react to quarterly results, however, is hard to say. Tesla shares have a way of doing the unexpected.
Write to Al Root at allen.root@dowjones.com
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(END) Dow Jones Newswires
July 21, 2026 04:33 ET (08:33 GMT)
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