Tesla Inc. (TSLA) faced price target cuts from Wall Street analysts following its second-quarter earnings miss, with firms citing concerns that the company's rising AI spending must now be matched by tangible progress in its robotaxi and Optimus programs. Shares fell more than 12% in Thursday's opening trade, marking the stock's worst single-day decline since June 2025. Analysts said accelerating capital expenditure on AI infrastructure, Full Self-Driving, and robotics is weighing on margins and free cash flow, shifting investor focus from long-term vision to near-term execution. Morgan Stanley, Canaccord, Cantor Fitzgerald, and JPMorgan all lowered price targets while maintaining their respective ratings, with most emphasizing the need for meaningful robotaxi deployments and Optimus milestones over the next six months.
Morgan Stanley and Canaccord Call for Tangible Robotaxi and Optimus Milestones
Morgan Stanley analysts said Tesla's accelerating capital expenditure cycle is a "necessary investment" to maintain its leadership in autonomy and robotics, even as the spending pushes free cash flow further into negative territory. The firm said investors are increasingly looking for "tangible" milestones from Tesla's robotaxi and Optimus programs as the company pours billions into AI initiatives. Morgan Stanley lowered its price target to $400 from $417 while maintaining an 'Equal Weight' rating.
Canaccord analysts said they want to see meaningful robotaxi deployments over the next six months as Tesla seeks to prove its long-term AI strategy. The firm also wants to see more momentum around a merger with Space Exploration Technologies Corp. (SPCX) and a boost in the company's core electric vehicle business. Canaccord trimmed its price target on Tesla shares to $410 from $450 while keeping a 'Buy' rating.
Cantor Fitzgerald and JPMorgan Lower Price Targets, Maintain Ratings
Cantor Fitzgerald kept its 'Overweight' rating despite lowering its price target to $485 from $510, saying it still views fiscal 2026 as a potentially transformational year for Tesla, driven by autonomy, artificial intelligence, robotics, and custom chips. The firm added that its estimates remain conservative pending further details on the Semi, Cybercab, and Optimus programs.
JPMorgan maintained its 'Neutral' rating while trimming its price target to $445 from $475, citing weaker automotive gross margins, lower regulatory credit revenue, higher financing costs, and warranty headwinds. The firm added that broader robotaxi deployment and Cybercab production could provide downside support for the stock.
Musk Reports High FSD Take-Rate, Calls 2026 Massive Capex Year
During a post-earnings call with analysts, Tesla CEO Elon Musk said the company is seeing a "very high take-rate" for the Full Self-Driving (FSD) technology. "I think for a lot of people, they're actually buying Tesla Full Self-Driving with a car attached, as opposed to a car with FSD. They're coming into our stores in the U.S. and telling me they want the Full Self-Driving and with whatever car it comes with, essentially," he said.
Musk expressed confidence that Tesla's capex investments will yield "incredible" returns, while adding that 2026 is a "massive capex year." "We are going as fast as humanly possible in scaling robotaxi, while trying to ensure that we do not harm anyone at all, and ideally, not even run over a pet," he added.
Retail Sentiment on Stocktwits Trends Neutral
Retail sentiment on Stocktwits around Tesla trended in the 'neutral' territory at the time of writing. One user believes Tesla's shares will fall below $300 by the end of the day. TSLA stock is down 27% year-to-date and 1% over the past 12 months. The S&P 500 ETF (SPY) is up 17% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 24%. The Vanguard Total Stock Market Index Fund ETF (VTI) and the Vanguard S&P 500 ETF (VOO) are up 17% during this period.
FAQ
What did Wall Street analysts do to Tesla stock price targets following Q2 earnings?
Morgan Stanley lowered its price target to $400 from $417 (Equal Weight), Canaccord cut its target to $410 from $450 (Buy), Cantor Fitzgerald reduced its target to $485 from $510 (Overweight), and JPMorgan trimmed its target to $445 from $475 (Neutral). All firms cited concerns over AI spending outpacing tangible progress in robotaxi and Optimus programs.
Why did Tesla stocks fall more than 12% in Thursday's opening trade?
Shares fell more than 12% in Thursday's opening trade following a second-quarter earnings miss and analyst price target cuts. The decline marked Tesla's worst single-day drop since June 2025, driven by investor concerns that rising AI infrastructure spending is weighing on margins and free cash flow without corresponding near-term execution milestones.
What did Elon Musk say about Tesla's Full Self-Driving take-rate?
During a post-earnings call, Musk said Tesla is seeing a "very high take-rate" for Full Self-Driving technology, with customers telling him they want FSD "with whatever car it comes with." He added that 2026 is a "massive capex year" and that the company is scaling robotaxi "as fast as humanly possible" while prioritizing safety.
