Shares of Tesla (NASDAQ: TSLA) plunged on Thursday after the Elon Musk-led tech titan reported earnings that fell short of investors’ expectations.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Heavy spending weighed on Tesla’s profit margins
Tesla’s revenue rose 26% year over year to $28.2 billion in the second quarter. The gains were fueled by a 23% jump in automotive sales to $20.5 billion, a 13% rise in energy generation and storage revenue to $3.1 billion, and a 50% surge in services and other revenue to $4.6 billion.
But sales weren’t the issue. Soaring costs and declining margins were.
The electric vehicle (EV) maker’s operating margin fell to 1.4% from 4.1% in the prior-year quarter, driven by a 47% surge in operating expenses.
All told, Tesla’s adjusted net income declined 17% to $1.2 billion, or $0.33 per share. That was well below Wall Street’s estimates, which had called for per-share profits of $0.54, according to Yahoo! Finance.
Worse still, Tesla’s free cash flow turned negative as its capital expenditures outpaced its operating cash flow.
Project delays are getting tiresome
Investors would likely have more patience if they were confident that this spending would produce strong returns. But as Musk ramps up Tesla’s capital expenditures — to more than $25 billion in 2026 alone — he’s failing to meet previously communicated timelines for key projects such as the company’s Robotaxi service and Optimus robots.
Shareholders are growing increasingly frustrated. And many investors decided to sell their shares today.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again
In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. If you’d invested $5,000 then, you’d be sitting on $2,753,481 today.*
Now, for the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. It’s a key player in the $1.8 trillion space race, and with the stock recently sitting 20% off its highs, the window to get in early is closing fast.
*Stock Advisor returns as of July 20, 2026
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
Why Tesla Stock Crashed Today was originally published by The Motley Fool
