Tesla Inc. (NASDAQ:TSLA) reports Q1 earnings after Wednesday’s closing bell — and one market watcher isn’t impressed with what’s coming.
“I haven’t seen a new Tesla on the street in a long time,” Stephen Callahan, Trading Behavior Specialist at Firstrade. “I’m not enthusiastic about this.”
- TSLA stock is moving ahead of earnings. See the price action here.
The skepticism arrives at a loaded moment. Tesla is the first of the Magnificent Seven to report this season, carrying a 231x forward P/E and a market cap of $1.45 trillion, according to Benzinga Pro.
EPS Vs. CapEx
Tesla shares are down 12.7% year to date, making it the second-worst Mag 7 performer behind Microsoft Corp. (NASDAQ:MSFT).
Wall Street’s consensus calls for EPS of $1.01 on revenue of $22.35 billion, implying 15.6% top-line growth over the same quarter last year, per Benzinga Pro data.
But Callahan told Benzinga that the bottom line isn’t what investors are really watching.
“Analysts expect to see 38% growth in earnings per share, but I think the market will be more focused on their sharp increase in capital expenditures,” he said.
That concern has teeth. After spending $1.49 billion on capex in Q1 2025, Tesla averaged over $2.3 billion per quarter across the following three quarters — a 57% jump, per SEC filings — with no clear revenue inflection yet to show for it.
The deeper issue is strategic. Tesla is trying to straddle two very different businesses at once.
“Earnings are tough, they’re between launching robots and selling cars to keep the lights on,” Callahan said.
The options market is only pricing in a modest post-earnings move, but the stakes for the broader AI trade are anything but modest.
As the first Mag 7 name to report, Tesla’s results — and more importantly, its guidance — will set the tone for earnings season across the group.
What To Watch
Callahan laid out what investors should actually be tracking when results drop.
On the auto side, vehicle delivery numbers are the key number to watch. A miss against consensus would be a direct signal of weakening EV demand.
On the AI and robotics side, the focus should be Robotaxi timelines and whether management can draw a credible line between today’s spending and tomorrow’s revenue.
“With this high stock valuation, investors want to see evidence that the AI and robotics can produce clear monetization paths for the company beyond traditional auto sales,” Callahan said.
At current prices, Tesla stock has no room for a stumble — on deliveries, on capex discipline or on the robotics timeline.
TSLA Price Action: Tesla stock was ticking up by 0.73%, sitting at $389.23 at the time of publication Wednesday, 22% below the 52-week high.
Photo: Shutterstock AI
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