Tesla shares plunge 15% in worst intraday drop since 2025

Tesla's stock plunged nearly 15% on Thursday, July 23, 2026, marking its worst intraday drop in over a year after the company reported second-quarter earnings that fell sharply short of Wall Street's profit expectations. The sell-off erased tens of billions in market value and intensified investor scrutiny over the electric vehicle maker's aggressive spending on artificial intelligence and robotics projects.

Adjusted earnings per share for the quarter came in at $0.33, significantly below analyst estimates that ranged from approximately $0.50 to $0.51. While revenue of $28.24 billion exceeded forecasts, it was overshadowed by a steep decline in profitability. The company's GAAP operating income fell 57% year-over-year to $398 million, with the operating margin narrowing to 1.4%. Gross margins also contracted, sliding to between 16.3% and 16.8%.

The primary driver behind the profit shortfall was a massive surge in capital expenditures, which jumped 142% year-over-year to $5.79 billion. This spending, directed toward scaling AI compute, robotics, and chip manufacturing infrastructure, contributed to a free cash flow deficit of $1.09 billion for the quarter. Company executives had...