Tesla (TSLA) stock is once again in the spotlight as it continues to climb despite its disastrous Q1 earnings report. Revenue declines, margin pressure, and slowing global EV demand painted a bleak Q1 picture. Yet investors seem unfazed, driven more by strong faith in Elon Musk’s bold promises than by the underlying financials. TSLA stock gained over 5% on Wednesday.
Is the Recovery in Sight or Just a Rebound?
After months of volatility and growing skepticism from Wall Street, Tesla’s recent stock rally has sparked optimism among investors. However, much of it feels like déjà vu. Musk has a history of big promises, many unfulfilled. After the latest earnings report, he painted an optimistic future, but critics argue much of it was misleading. For now, the rally seems less like a recovery and more like a fresh round of investor hope.
Behind Musk’s promises, the picture is far from rosy. In Q1, Tesla’s automotive revenue dropped 20% year-over-year, while total revenue fell 9%. The most alarming figure was a staggering 70% plunge in net income, marking one of the company’s weakest quarters in recent history.
Musk Points to Long-Term Vision
In response to falling demand, Musk clarified that Tesla isn’t immune to macroeconomic pressure, noting that economic uncertainty tends to delay major purchases like cars. Without those headwinds, he said, demand remains strong. For context, total deliveries declined by 13% in Q1.
Additionally, Musk plans to refocus on Tesla, stepping back from DOGE and side ventures. The company will also fast-track a cheaper Model Y to boost volume and margins and launch its long-awaited robotaxi in June. Musk also reiterated his bold claim that Tesla will produce millions of humanoid robots by the decade’s end, making Tesla the world’s most valuable company.
Tesla Cuts 2025 Capex Outlook
Even with Musk’s promises, the outlook numbers paint a different picture. The EV giant expects to spend over $10 billion this year, down from the $11 billion projection shared just three months ago.
The company also withdrew its capex guidance beyond 2025, signaling growing caution amid an uncertain macroeconomic backdrop. In Q1, Tesla spent just $1.49 billion in capex, underscoring a more conservative stance on near-term investments.
Is Tesla a Buy or Sell Stock?
According to TipRanks, TSLA stock has received a Hold consensus rating, with 16 Buys, 11 Holds, and 12 Sells assigned in the last three months. The average price target for Tesla shares is $286.6, suggesting a potential upside of 14.3% from the current level.
