Tesla stock tumbles 14% after profit miss; full-year capex spend of $25 billion confirmed

Tesla ( TSLA ) stock sold off on Thursday after the EV maker reported mixed second quarter results that missed Wall Street expectations. Cash burn, and and production of physical AI products like Cybercab and Optimus could be a concern.

Tesla reported Q2 revenue of $28.24 after the closing bell on Wednesday, versus the $26.32 billion expected per Bloomberg consensus, up 26% from a year ago. Tesla posted adjusted earnings per share of $0.33 compared with the $0.50 estimated. Adjusted EBITDA came in at $3.2 billion, versus $4 billion expected.

Tesla stock slid 14% in midday trade on Thursday as investors weighed the earnings miss alongside the company's physical AI efforts.

Tesla said Optimus humanoid robot production remains on track for later this year, though key details were missing.

"The initial Optimus builds will be used in our Optimus Academy for training data collection and further functionality development," the company said in a statement, but Tesla did not indicate when the latest version of Optimus would be revealed, nor when volume production would be achieved.

Tesla also confirmed that its Robotaxi rollout spanned seven major metro areas. "We expanded the unsupervised operation area in Austin and launched unsupervised rides in Miami, Orlando, and Tampa in July," the company said. "Preparation for expansion of our Robotaxi service to additional U.S. metros continued, including testing, permitting and first responder training."

"We'll continue to scale very rapidly with Robotaxi — more than 10% growth in miles driven per week," CEO Elon Musk said on the earnings call, acknowledging that safety considerations will limit its growth.

"TSLA noted Cybercab/robotaxi production began at Giga Texas with Cybercab now at 380K + unsupervised miles across 7 cities, and we believe the key is no major incidents, although we believe the number of cybercabs/Robotaxis (~25-50) are significantly smaller than Waymo (2-3K)," Mizuho analyst Vijay Rakesh said in a note late Wednesday night.

Mizuho however cut its Tesla price target to $450 from $480, citing near term challenges like tariffs and loss of tax credits.

Full self-driving active subscriptions climbed to 1.48 million, up 56% from a year ago, Tesla said.

Tesla's free cash flow burn continued in the quarter, though it was less than expected, coming in at -$1.09 billion versus -$3.64 billion estimated. Musk added that 2026 would be a "massive capex year," and CFO Vaibhav Taneja confirmed that Tesla's capex would be "more than $25 billion" this year. Analysts expected full-year capital expenditures to hit $25.16 billion.

Tesla is spending aggressively on capital expenditures across several fronts at once: Optimus humanoid robot production, the AI data center build-out, and the Cybercab production ramp-up. Those are the bets that justify Tesla's rich valuation, but they are also consuming cash right as the auto business is improving.

On the flipside, investors are concerned that Tesla is not spending enough on its physical AI efforts, and what success looks like.

"The open question remains the timing of when we actually see the ROI – specifically, a scaled robotaxi network that demonstrates increasing density and improving safety within existing cities, plus tangible progress commercializing Optimus," Morgan Stanley analyst Andrew Percoco wrote in a note published Thursday morning. "Absent consistent, transparent proof points, we'd expect the market's tolerance for incremental capex to narrow."

The revenue jump comes after Tesla reported a blowout delivery quarter . The EV maker reported Q2 deliveries of 480,126, up 25% year over year and easily topping Bloomberg consensus estimates of 397,466. Energy storage deployments came in at 13.5 GWh, more than 50% above the first quarter's 8.8 GWh.

The new Model Y is now fully ramped, versus a year ago when the changeover at the factory depressed production. Tesla has also been competing hard on price around the world, and buyers have responded.

And then there's the Musk effect, or the fading of it. Tesla's CEO still spouts off controversial takes and political positions, but his DOGE initiative in the White House is over, and buyers appear to be looking beyond or ignoring his recent past.