Tesla Inc. investors are in for a rare treat Wednesday afternoon: an earnings report that analysts say should be a blowout.
The trouble is the actual numbers are likely to get overlooked as Wall Street seeks evidence that Elon Musk’s artificial intelligence and robotics ventures justify the stock’s sky-high valuation.
Wall Street expects the electric-vehicle maker to post an almost 30% jump in first-quarter adjusted profits from a year ago and a 15% increase in revenue when it releases results after the bell. That’s a strong turnaround from the fourth quarter, when adjusted earnings fell more than 30% and revenue slid about 3%, according to data compiled by Bloomberg.
But in many ways, those figures are just an afterthought, since the stock is now trading primarily on Tesla’s ambitions for AI and robotics. That’s what pushed the shares to an all-time high in December. And the questions about those goals are what have sent the stock reeling 21% since it hit that record, making it the worst performing stock among the Magnificent Seven technology giants over that time while lagging the S&P 500 Index’s 3.9% gain as of Tuesday’s close.
Tesla shares are up 0.5% Wednesday as stocks broadly advance after US President Donald Trump extended a ceasefire with Iran indefinitely.
“Investors are underwriting a decade-long vision,” said Dave Mazza, chief executive officer at Roundhill Investments, which owns Tesla shares. “That said, patience has a price.”
Tesla shareholders are indeed paying a steep price for the stock. At 183 times forward earnings, it’s the third most expensive stock in the S&P 500 after Warner Bros. Discovery Inc. and Boeing Co. The Bloomberg Magnificent Seven Index is priced at around 27 times forward earnings, which is elevated because Tesla is such an outlier compared to the other six tech behemoths. For example, the next highest valuation in the group belongs to Apple Inc. at about 30 times forward earnings, followed by Alphabet Inc. at 26 times. AI chip giant Nvidia Corp. is toward the bottom with a multiple of 22 times as of Tuesday’s close.
As a result, investing pros say strong quarterly numbers that beat already lowered expectations aren’t likely to move the richly valued stock. Rather, Tesla needs one of two things to drag its shares out of their rut: Concrete signs of progress on its robotaxi plans or a shiny new object from Musk’s playbook that moves the goalposts for the company and resets the timer to show results.
“When a stock trades on a long-term story, patience doesn’t disappear overnight,” said Haris Khurshid, chief investment officer at Karobaar Capital, which owns Tesla shares mostly through derivatives. “The existing base is still holding on, but it’s getting harder to attract new buyers without clearer results.”
Wall Street is already showing its pessimism. Analysts have cut their estimates for first-quarter earnings by more than 55% over the past 12 months and roughly 30% in the past six months. Beyond slumping sales for its EVs, the problem is that Tesla’s self-driving cars and Optimus humanoid robots remain years, if not decades, away from wide commercial adoption.
For instance, Tesla’s earnings model created by Jefferies analyst Philippe Houchois doesn’t include revenue from robotaxis and robots until 2027. The limited, incremental progress on those initiatives could cause Tesla to pivot to new opportunities, according to Wells Fargo analyst Colin Langan, who has a sell equivalent rating on the stock. “What’s the new ‘razzle-dazzle’?” he asked in an April 13 note.
This is a particularly thorny issue because Tesla’s appeal as the only stock that allows people to directly bet on Musk is set to erode soon, with the billionaire’s space and rocket company SpaceX targeting an initial public offering later this year.
“The potential for a SpaceX IPO would loom heavily on TSLA’s stock, as incremental retail investor dollars that otherwise would’ve flowed to TSLA instead flock toward SpaceX,” said James Picariello, an analyst at BNP Paribas.
There have been some signs that changes are brewing. Tesla is reportedly working on building a cheaper vehicle 18 months after Musk called plans for a widely anticipated $25,000 car “pointless.” Last month, Musk announced his Terafab project, which aims to manufacture chips for robotics, AI and space data centers. And speculation about a potential merger with SpaceX persists.
Meanwhile, internal market forces that can create a rally in Tesla shares are waning. Bearish bets on the stock have plummeted, with short interest at roughly 2% of the free float, the lowest level since February 2025, according to data from S3 Partners. That limits the ability for unexpected good news to trigger short squeezes that send the stock flying.
“With short interest no longer elevated, buy-to-cover dynamics are diminished, limiting the market’s ability to absorb downside flows,” S3 managing director Matthew Unterman wrote in an April 10 note.
Technical indicators for Tesla shares aren’t offering much encouragement either. Their 50-day moving average recently slid below the longer-term 200-day moving average, forming a bearish pattern called a death cross, which typically signals that momentum is skewing toward a decline in the stock price.
But despite the negative short-term sentiment, Tesla investors can still hope that a “magic bullet” from Musk shakes the stock out its torpor, said John Kolovos, chief technical strategist at Macro Risk Advisors.
“I still love it long term,” Kolovos said, adding that investors “just gotta let it do its thing.”
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