Tesla shares fell 15% following a second-quarter report that showed record revenue but a significant drop in operating profit.
Tesla shares sank approximately 15% on Thursday, closing at $319.69 after the company reported its second-quarter results for 2026. While the company achieved record vehicle deliveries of 480,126 units and record revenue of $28.2 billion, operating income fell 57% year over year to $398 million. This decline in profit was driven by heavy spending on artificial intelligence, the robotaxi service, and the Optimus robot program, alongside a collapse in regulatory credit revenue. Despite the price drop, Wall Street analysts maintain a bullish outlook, with an average price target of $412 representing a 29% upside from the current close. However, the stock still trades at roughly 300 times earnings, suggesting that much of the future success of which analysts are optimistic remains to be realized. Investors are currently weighing whether the current price reflects a buying opportunity or if the market is simply slow to adjust to the company's current operating margins of 1.4%.