Tesla Stock Falls 1.3% After Q2 Profit Miss, $25B Capex Plan July 23

Tesla reported mixed second-quarter results on July 22, beating revenue expectations with $28.24 billion but missing profit forecasts with adjusted earnings of $0.33 per share versus $0.50 expected. The stock fell 1.3% to $374.01 as investors weighed record vehicle deliveries against declining margins and massive planned spending on AI and robotics. CEO Elon Musk signaled confidence in future returns despite near-term cash burn.

Revenue beats but profit crumbles

Tesla delivered $28.24 billion in Q2 revenue, up 26% year-over-year and ahead of the $26.32 billion consensus. However, adjusted earnings per share fell to $0.33, down 34% from the $0.50 estimate and 18% below the prior year’s $0.40. Gross margin contracted to 16.8% from 17.2%, missing analyst expectations of 19.4%. The company sold lower-cost Model 3 and Y variants after discontinuing the flagship Model S and X, pressuring prices and profitability.

Massive capex and borrowing plans ahead

Tesla confirmed $25.16 billion in capital expenditures for 2026, with CFO Vaibhav Taneja stating spending will grow over the next two to three years. The company plans to borrow as much as $30 billion to accelerate investments in robotaxis, Optimus humanoid robots, semiconductor manufacturing, solar production, and AI compute infrastructure. Musk called 2026 a “massive capex year” but expressed confidence the investments would deliver “incredible returns.”

Robotaxi and Optimus progress amid safety caution

Tesla expanded its Robotaxi service to seven major metro areas, launching unsupervised rides in Miami, Orlando, and Tampa in July. Musk stated the service will scale at over 10% growth in miles driven per week, though safety considerations will limit expansion speed. Optimus humanoid robot production remains on track for later this year, with initial units earmarked for Tesla’s Optimus Academy for training data collection. The company did not announce a release date for the latest Optimus version.

Cash burn eases but margins squeeze investors

Free cash flow turned negative at negative $1.09 billion, better than the negative $3.64 billion forecast. Operating margin compressed to just 1.4% from 4.1% a year ago, as operating expenses climbed faster than revenue. Full-self driving active subscriptions grew to 1.48 million, up 56% year-over-year, but the core automotive business bore the weight of price competition and margin erosion.

Final Thoughts

Tesla’s Q2 miss on earnings despite record revenue highlights the tension between growth and profitability. With Meyka grading the stock C+ and analyst consensus at Hold, the $25 billion capex commitment and $30 billion borrowing plan signal Musk is betting heavily on future AI and robotics returns rather than near-term profit recovery.

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