Tesla Shares Drop 15% After Q2 Earnings Miss, Despite Record Revenue
Tesla (NASDAQ: TSLA) shares fell approximately 15% following its second-quarter earnings report on July 24, 2026. The decline came despite record revenue of $28.2 billion and a new high for vehicle deliveries at 480,126 units. However, operating income dropped sharply by 57%, to just $398 million, with an operating margin of only 1.4%. This was driven largely by increased spending on AI initiatives like the robotaxi service and Optimus robot program, as well as CEO Elon Musk's stock-based compensation. Analysts remain optimistic about Tesla’s long-term prospects, maintaining a 'buy' consensus rating and setting an average price target of $412 — implying 29% upside from Thursday’s closing price. However, the current valuation remains high at around 300 times earnings based on Q2 results. While services revenue grew by 50%, it still constitutes only a small portion of Tesla's overall business. The stock closed near its 52-week low and is trading with little margin for error given the heavy discounting built into future expectations.
Tickers: $TSLA
Topics: analyst ratings Q2 earnings miss stock price movement Tesla