Image of Founder Elon Musk by Frederic Legrand – COMEO via Shutterstock
The second-quarter earnings season is heating up, and two “Magnificent Seven” constituents — namely Tesla (TSLA) and Alphabet (GOOGL) — will release their reports this week. The earnings season for tech companies began on a sour note earlier this month, as Netflix (NFLX) disappointed with its guidance, pulling NFLX stock down to a 52-week low.
These latest Q2 earnings reports are coming at a time when the rally in artificial intelligence (AI) stocks has shown signs of weariness, with chip and memory companies looking particularly weak. Specifically, TSLA stock is down 16% so far this year, making it one of the worst-performing “Magnificent Seven” stocks alongside Microsoft (MSFT).
Notably, apart from the general weakness in “Magnificent Seven” shares (barring Apple (AAPL), which I have previously noted is akin to an “anti-AI” trade), Tesla has been out of favor with many investors who see SpaceX (SPCX) as a purer play on CEO Elon Musk. Lingering concerns about the priorities of the world’s richest person — who became the first trillionaire this year — have been affecting investor sentiment.
SPCX stock peaked above $225 but has since fallen below its initial public offering (IPO) price and is languishing near its 52-week low. As for Tesla, the stock has failed to decisively break above $400 even though Q2 deliveries easily beat estimates and were the highest-ever for the quarter. Moreover, the period was the second-best quarter ever, with Q3 2025 being the only time Tesla delivered more vehicles. However, that quarter is not strictly comparable because U.S. electric vehicle (EV) sales soared in Q3 2025 as buyers rushed in to purchase vehicles before the EV tax credit expired at the end of September.
Tesla Q2 Earnings Estimates
Consensus estimates call for Q2 revenue to rise almost 18% year-over-year (YOY) to $26.5 billion. While I was circumspect on Tesla meeting Wall Street’s revenue estimates in Q1, this time around I believe Tesla should be able to beat consensus estimates given the rise in deliveries. Pricing was likely a tailwind for Tesla in Q2 as the company raised Model Y prices during the quarter for the first time in two years.
For the bottom line, analysts are modeling EPS to rise 15% YOY to $0.31. Tesla should be able to deliver an earnings beat in the quarter given the steep rise in deliveries and higher pricing.
Should You Buy TSLA Stock Ahead of Q2 Earnings?
I am constructive on Tesla heading into Q2 earnings and see a higher possibility of a post-earnings bounce versus a decline given the tepid expectations from the report and the weakness in TSLA stock heading into the confessional.
Meanwhile, Musk’s commentary during the earnings call will be as important as the financials, if not more important. In the past, the Tesla CEO has influenced the price action of stocks and cryptocurrencies, along with triggering wild moves in TSLA stock. Investors will be looking for upbeat commentary from Musk during the Q2 call. Markets will also gauge any commentary on his time commitments, since SpaceX is now a publicly listed company.
However, time might be running out for Tesla and Musk. One of the most upvoted questions on Say Technologies for the earnings call is as follows: “Tesla has missed short term guidance on robotaxi [for three] earnings reports in a row, from 50% coverage of USA by end of 2025 to most recently 7 new cities in 1H26. What is keeping Tesla back from accomplishing these short term goals that they’ve set for themselves?”
For years, Musk has been promising the moon to investors, only to miss self-declared deadlines and forecasts almost every time. The company formally withdrew its forecast of 20 million annual deliveries by 2030 and has virtually given up on the 50% annual delivery growth guidance. From projecting 1 million robotaxis by 2020 and perpetual promises of full autonomy by year-end, Tesla hasn’t been a shining example of meeting projections and has actually been a case of overpromising and underdelivering. Even the robotaxi rollout has been progressing much slower than expected.
All told, Tesla badly needs an Elon Musk pump, as TSLA stock is now battling for the wallet and attention share of his fans, many of whom are now betting on SpaceX instead. I would bet on positive commentary from Musk during the Q2 earnings call and view TSLA stock as a buy before the report.
On the date of publication, Mohit Oberoi had a position in: TSLA , GOOG , MSFT , NFLX . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
