Tesla (TSLA) shares fell about 13.5% on July 23, marking one of the biggest single-day drops in the company’s history. So far this year, Tesla’s market cap has shrunk by about 27%. The drop came the day after the company released its second-quarter earnings report: Q2 earnings per share (EPS) were $0.31, far below Wall Street analysts’ expected $0.51.
Tesla Q2 earnings: EPS of $0.31 below the expected $0.51
Tesla’s second-quarter earnings showed that Q2 earnings per share (EPS) were $0.31, below the $0.51 expected by Wall Street analysts. Q2 capital expenditures reached $5.8 billion, resulting in the first negative free cash flow in more than two years of $1.1 billion. Q2 revenue beat expectations, but it was not enough to boost market confidence.
This year, Tesla has heavily invested in robotics, autonomous driving, and artificial intelligence, with little return in the short term. Strong Q2 electric-vehicle deliveries (driven by European demand and rising fuel costs) were unable to offset investors’ concerns about high spending.
Musk explains during the earnings call
On the earnings call on July 22 (Wednesday), Musk faced questions from investors about Optimus humanoid robots and the Robotaxi timetable for an autonomous ride-hailing service. As of the time of reporting, Robotaxi only provides service within a limited area in the United States, and Optimus has not yet been sold to consumers.
Musk said Optimus would be Tesla’s most important product ever, while also warning that there are many challenges in research and development. He said the slow rollout of Robotaxi is due to safety concerns and fears that fatal incidents could lead to negative media coverage and regulatory crackdowns. Over the years, Musk has repeatedly missed the time targets he set for both products.
Broad market selloff: Nasdaq down more than 2%, seven megacaps’ market caps evaporate sharply
On Thursday, the overall U.S. stock market fell, with all major indices and “seven megacaps” under pressure across the board:
Nasdaq Index: down more than 2%, hitting the lowest level since early May
S&P 500 Index: down more than 1%
Dow Jones Industrial Average: down more than 1%
Alphabet: down 6.5% (after announcing a higher spending plan and its first cash burn)
Tesla: down about 13.5% (worst among the seven megacaps)
Total market cap loss for the seven megacaps: $767 billion (Bloomberg reported)
VIX volatility index: up 3 points to 19.64 (after previously touching a near one-month high)
FAQ
What was Tesla’s earnings per share for Q2 2026, and how did it compare to expectations?
Tesla’s earnings per share (EPS) for Q2 2026 was $0.31, below the widely expected $0.51 by Wall Street analysts. Although Q2 revenue beat expectations, the large EPS miss triggered a stock selloff of about 13.5% on the second day after the earnings release.
How much was Tesla’s capital expenditure in Q2, and what impact did it have on cash flow?
Tesla’s Q2 capital expenditures were $5.8 billion, resulting in negative free cash flow of $1.1 billion for the first time in more than two years. The high capital expenditures mainly went into R&D in the areas of robotics, autonomous driving cars, and artificial intelligence.
How much did the “seven megacaps” combined lose in market cap on Thursday?
According to Bloomberg, shares of Alphabet, Amazon, Meta, Nvidia, Apple, Microsoft, and Tesla all fell across the board on Thursday, for a combined market cap loss of $767 billion. Tesla’s decline was about 13.5% (the biggest single-day drop), while Alphabet fell 6.5%.
