Tesla Stock: Plunges 9% After Disappointing Earnings

Tesla's stock tumbled over 9% following disappointing second-quarter results, with revenue dropping to $22.5 billion, slightly below analyst expectations of $22.6 billion. The electric vehicle pioneer reported a 16% decline in profits to $1.17 billion as vehicle deliveries fell dramatically by 13.5% to 384,122 units. Despite achieving a better-than-expected gross margin of 17%, the company's performance was hampered by $300 million in tariff effects and increased warranty costs. Adding to investor concerns, Tesla reduced its 2025 investment forecast from over $10 billion to $9 billion, significantly below analyst projections of $10.16 billion, raising questions about funding for future initiatives.

Musk's Future Vision Fails to Convince Investors

CEO Elon Musk continues to emphasize future technologies rather than addressing current business challenges, focusing on robotaxi services planned for late 2025, more affordable vehicle models, and progress with the Optimus humanoid robot. However, investors appear increasingly skeptical of these promises amid intensifying competition from Chinese manufacturers and declining sales in key markets. The European market has been particularly problematic, with June registrations plummeting by nearly 40% to just 20,349 vehicles. Analyst sentiment remains mixed, with some maintaining optimistic price targets while others, like JPMorgan, assign an "Underweight" rating with a price target of $115—representing a potential 62% decline from current levels.

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Source StockWorld