Tesla (NASDAQ:TSLA) stock is under the microscope as the EV giant gets set to report second-quarter earnings tomorrow (Wednesday, July 23) after the market closes. Beyond the headline numbers, investors will be watching closely for updates on Tesla’s innovation efforts – including its Optimus robot, expanding robotics ambitions, and a potential investment in xAI.
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Despite ongoing concerns around weak sales, the loss of EV tax credits, and CEO Elon Musk’s polarizing reputation, some analysts see a potential shift in the narrative. Among them is Wedbush analyst Daniel Ives, who believes the set-up going into this report is “dramatically different” from the more cautious backdrop ahead of Q1.
“While on the April earnings call the big focus was Musk officially leaving the Trump Administration and pressure to refocus on being CEO on Tesla….now investors are seeing more of a ‘wartime CEO’ as Elon is laser focused on the Robotaxi expansion in Austin with more cities soon on the docket for this key autonomous initiative,” Ives opined.
Calling Tesla “one of the clear future leaders in AI,” Ives pointed to the company’s growing momentum in autonomous tech and robotics as key catalysts. The analyst believes the market is starting to grasp the scale of what Tesla is building – not just a car company, but an AI-driven platform with massive long-term potential. In his view, that opportunity alone could add $1 trillion in value to the Tesla story.
Of course, innovation alone won’t carry the story. Tesla also needs to stabilize its core markets, particularly China, where sales have stumbled amid fierce competition. Encouragingly, June marked the first monthly sales increase in eight months, driven by strong demand for the refreshed Model Y. For Ives, this rebound is a key signal that Tesla’s execution in its most important growth region is improving.
As for the raw results, the Street is expecting revenues of $22 billion, with automotive revenue reaching $16 billion. Gross margins (excluding credits) are seen landing between 13% and 14%, with EPS around $0.39. Still, the loss of EV tax credits remains a looming challenge. Ives cautions that this “cash cow” will play a smaller role in Tesla’s free cash flow by 2026, though he expects management to address the issue on the call and offer guidance for the second half, particularly as China demand recovers and Model Y momentum builds.
“Importantly we anticipate deliveries globally to rebound in 2H led by some improvement on the key China front with the Model Y refresh a catalyst,” Ives further said.
Bottom line, Ives remains the most bullish voice on the Street, assigning TSLA shares with an Outperform (i.e., Buy) rating and a Street-high $500 price target. Investors could be sitting on ~50% gains, should Ives’s forecast play out as anticipated. (To watch Ives’ track record, click here)
Generally speaking, the rest of the analyst community is far less optimistic; Tesla stock only claims a Hold (i.e., Neutral) consensus rating, based on a mix of 13 Buys and Holds, each, plus 8 Sells. The forecast calls for a 12-month drop of ~10%, considering the average price target stands at $299.52. (See Tesla stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.