Tesla (TSLA) is set to report its Q4 2025 earnings this week, and expectations are high as the stock sits at a critical turning point. After a volatile period marked by price cuts, margin pressure, and big AI promises, investors are looking for clear signs of where Tesla goes next. While the headline numbers will matter, the stock’s reaction will likely depend on a few key details in the earnings report and management’s commentary. Here are three factors that could shape TSLA stock’s next big move.
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1. Vehicle Margins
Roughly 75% of Tesla’s revenue still comes from EV sales, making margins a critical focus for investors. For context, in Q3 2025, Tesla’s automotive revenue was $21.2 billion out of $28.09 billion in total revenue. After repeated price cuts, the company’s profitability has come under pressure. Overall, investors will be watching automotive gross margin excluding regulatory credits, signs that vehicle pricing has stabilized, and evidence of cost savings from manufacturing efficiency and scale.
Even a modest improvement in margins could be enough to support a rebound in TSLA stock.
2. Updates on Tesla’s FSD and Robotics
Tesla increasingly trades as an AI-driven growth story, not just an automaker. As a result, investors will be paying close attention to updates on Full Self-Driving (FSD) adoption and pricing, progress in AI compute and autonomy, and any new details around timelines for Robotaxi or the Optimus humanoid robot.
Strong commentary or tangible progress on these fronts could quickly shift investor sentiment and drive TSLA stock higher.
3. Demand & Deliveries Outlook
Wall Street, as well as investors, is looking for clarity on Tesla’s demand momentum, not just backward-looking results. Investors will be watching order trends heading into the next quarter, inventory levels, and management’s commentary on global EV demand. For instance, Tesla continues to face intensifying competition from domestic manufacturers in China, with market share pressure building despite the company’s established local production footprint. Meanwhile, Europe has emerged as Tesla’s most significant challenge, with 2025 sales falling 27.8% year-over-year to 235,322 units.
Any signs of softening demand could outweigh an earnings beat and put pressure on TSLA stock.
Is TSLA Stock a Buy Ahead of Earnings?
Wall Street expects Tesla to report earnings of $0.45 per share, down 38.5% from the same period last year. Meanwhile, revenue is projected to come in at $24.77 billion, compared with $25.7 billion in the prior-year quarter.
For investors with a higher risk tolerance, any pre-earnings weakness could present an opportunity to build exposure at a discount—especially if they believe the company’s long-term growth story remains intact. Meanwhile, more cautious investors may prefer to stay patient. Waiting for clarity on earnings results, forward guidance, and the broader macro backdrop can help reduce the risk of getting caught on the wrong side of near-term volatility.
What Is the Price Target for Tesla?
According to TipRanks, TSLA stock has received a Hold consensus rating, with 10 Buys, eight Holds, and seven Sells assigned in the last three months. The average Tesla stock price target is $398.38, suggesting a potential downside of 11.3% from the current level.
