Investor's Corner
Tesla shares (TSLA) bolstered by Elon Musk’s China Gigafactory 3 agreement
Tesla shares (NASDAQ:TSLA) are showing some recovery after last week’s dive, trading up 1.81% at $324.28 per share amidst reports stating that Elon Musk has signed an agreement with Chinese officials to build Gigafactory 3 in Shanghai. The upcoming factory, which will be capable of producing up to 500,000 vehicles per year, is expected to begin construction after necessary approvals and permits for the facility are completed.
The boost in stock price comes as a relief to last week’s surprise sell-off after the company released its delivery and production numbers for Q2 2018. While Tesla was able to hit its target of producing 5,000 Model 3 in a week due to a “burst build” strategy at the final week of June, some Wall St. analysts nonetheless expressed doubts about the company’s capability to sustain production. CFRA Research analyst Efraim Levy, for one, downgraded TSLA to a “Sell,” stating that the Model 3’s 5,000-a-week production pace was not “operationally or financially sustainable.”
As news broke of Elon Musk’s trip to China, TSLA stock started climbing once more, ending Monday at $318.51 per share. The stock rallied as high as $326.29 on Tuesday’s intraday.
So far, Shanghai officials have confirmed that a preliminary agreement between Tesla and the government has been reached. The Shanghai government has also issued a press release about the upcoming factory.
“Tesla Gigafactory, which aims to build 500,000 electric vehicles per year, has officially settled in Shanghai Lingang Area Development Administration. It is the largest foreign-invested manufacturing project in Shanghai’s history. Today, on July 10th, the Shanghai Municipal People’s Government and Tesla signed a Cooperative Agreement.
“Mayor Ying Yong and Tesla Chairman and CEO Elon Musk were in attendance to unveil a plaque for the Tesla (Shanghai) Ltd. Electric Vehicle Development and Innovation Center. The agreement was signed by Zhou Bo, Executive Vice Mayor of Shanghai, and Robin Ren, Tesla Vice President for Worldwide Sales.”
Shanghai’s press release included a statement from Elon Musk, who described the upcoming facility as a “state-of-the-art vehicle factory and a model for sustainability.” A Tesla spokesperson also provided additional details on the recently-signed agreement, including an estimated timeline for the construction of the factory.
“Last year, we announced that we were working with the Shanghai Municipal Government to explore the possibility of establishing a factory in the region to serve the Chinese market. Today, we have signed a Cooperative Agreement for Tesla to start building Gigafactory 3, a new electric vehicle manufacturing facility in Shanghai.
“We expect construction to begin in the near future, after we get all the necessary approvals and permits. From there, it will take roughly two years until we start producing vehicles and then another two to three years before the factory is fully ramped up to produce around 500,000 vehicles per year for Chinese customers. Tesla is deeply committed to the Chinese market, and we look forward to building even more cars for our customers here. Today’s announcement will not impact our U.S. manufacturing operations, which continue to grow.”
Tesla’s China Gigafactory will be the California-based electric car maker’s largest facility outside the United States. The massive factory is expected to be tasked with the production of the Model Y, as well as some of the Model 3. With Gigafactory 3 producing vehicles in China, Tesla would be able to tap into the country’s growing and government-supported electric car market, while bypassing the steep import tariffs that the nation places on imported vehicles. Overall, Tesla’s Gigafactory 3 would join the ranks of Tesla’s three other main facilities — the Fremont, CA car plant, the Gigafactory 1 in NV, and Gigafactory 2 in Buffalo, NY. Another Gigafactory, expected to be dubbed as Gigafactory 4, is expected to be built in Europe within the next few years as well.
As of writing, Tesla shares are trading up 1.81% at $324.28 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Tesla short sellers won big following the company’s massive fall on Wall Street after it reported subpar Earnings on Wednesday.
Tesla short sellers collected about $4.12 billion in single-day profits on Thursday, according to Bloomberg. Shares fell as much as 15 percent during Thursday’s session. It closed as one of the worst days for Tesla on Wall Street in the past three years.
Investors sold off the stock after Tesla said it would aggressively direct its spending toward AI and its Optimus robot project. The company had record revenues, which were driven by one of the strongest quarters in terms of vehicle deliveries in company history.
However, it missed EPS estimates by reporting just $0.33, a far cry from the $0.53 analysts expected.
S3 Partners reported that about 3 percent of Tesla’s outstanding stock is sold short. Managing Director at S3, Ihor Dusaniwsky, provided the short seller’s potential profit, as well as another figure: shorts have likely had paper gains of $8.92 billion this year, as Tesla shares are down 30 percent in 2026.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla has burned short sellers many times in the past, but the company’s latest Earnings Call was a chance for those skeptics to taste some payback. Although the company gave some very transparent information regarding future projects, the rollout of Robotaxi, Optimus, and Semi, many investors took their profits on Thursday.
Notable short sellers like Michael Burry have been transparent about their skepticism around Tesla shares. Burry just revealed three weeks ago that he had opened up a new short on the stock, stating he shorted Tesla shares at $416.22. “Happy it jumped back to this level,” he said in a blog post.
At the time of publication, Tesla shares were down about 3 percent and the stock was trading at $309.92.
Tesla stock (NASDAQ: TSLA) endured one of its sharpest single-day declines in years on July 23, tumbling approximately 14.5 percent and closing near $320 after opening the session around $374. The drop erased more than $140 billion in market value amid heavy trading volume and left the shares at multi-week lows.
The sell-off followed the company’s second-quarter 2026 results, released the previous evening. Tesla reported record revenue of $28.2 billion, up 26 percent year over year, driven by a Q2-record 480,126 vehicle deliveries. Energy storage deployments also rose strongly.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Yet profitability disappointed sharply. Operating income fell 57 percent to $398 million, compressing the operating margin to just 1.4 percent. Non-GAAP earnings per share came in at $0.33, well below the roughly $0.53 analysts had expected. Free cash flow turned negative by $1.1 billion as capital expenditures surged 142 percent to $5.8 billion, largely tied to accelerated spending on artificial intelligence, robotics, and autonomous systems.
The losses on capex were expected, as Tesla said it would be spending heavily in 2026.
Investors also reacted to lingering uncertainty surrounding key product timelines. During the Earnings Call, management reiterated ambitions for Robotaxi deployment and the Optimus humanoid robot, but offered limited new concrete milestones, renewing questions about execution pace that have long accompanied Tesla’s ambitious roadmap.
The magnitude of the decline places it among Tesla’s more severe one-day percentage losses since its 2010 initial public offering. Historically, the two largest single-day drops (split-adjusted) remain September 8, 2020, when shares fell 21.1 percent amid broader market volatility and valuation concerns, and January 13, 2012, with a 19.3 percent plunge during the company’s early growth struggles.
Other notable declines include an 18.6 percent drop on March 16, 2020, at the onset of pandemic-related market turmoil. Thursday’s move ranks roughly ninth on the all-time list but stands out as the steepest in more than a year.
Despite the short-term pain, Tesla’s long-term trajectory has repeatedly recovered from such volatility. The latest results underscore both the strength of its core automotive and energy businesses and the near-term costs of heavy investment in next-generation technologies.
In a striking revelation that underscores the lucrative crossover between Big Tech and space exploration, Alphabet Inc., Google’s parent company, disclosed a massive $94.1 billion equity stake in SpaceX following the rocket company’s blockbuster initial public offering earlier this year.
The disclosure came in Alphabet’s quarterly filing, marking the first time the long-held private investment has been publicly valued at market prices. Google was an early backer, investing alongside Fidelity in 2015 with roughly $500-900 million at a time when SpaceX was valued around $12 billion.
That bet has delivered extraordinary returns, roughly a hundredfold, transforming a strategic play on satellite internet and launch capabilities into one of Alphabet’s largest assets.
Google, $GOOGL, has said they hold $94 billion in SpaceX, $SPCX, shares after IPO.
— unusual_whales (@unusual_whales) July 23, 2026
Of the total holding, approximately $80 billion remains subject to short-term post-IPO lockup restrictions, preventing near-term sales. An additional $14.1 billion faces longer-term restrictions, extending into the third quarter of 2027. This structure limits immediate liquidity but protects against market volatility as SpaceX transitions into public trading.
The SpaceX position contributed significantly to gains in Alphabet’s broader investment portfolio, which also includes a major stake in AI leader Anthropic. Combined, these holdings helped drive nearly $100 billion in investment gains during the second quarter, providing a substantial boost to net income amid ongoing AI spending pressures.
Analysts view the disclosure as validation of Alphabet’s venture strategy beyond its core search and cloud businesses. The investment aligns with deeper ties, including reported multi-billion-dollar deals for AI computing capacity on SpaceX infrastructure. As SpaceX advances Starship flights, Starlink expansion, and ambitious Mars goals under Elon Musk, Google’s stake positions it to benefit from the commercialization of space.
For Alphabet, the windfall highlights how patient, forward-looking bets in transformative sectors can yield outsized rewards. While lockups temper short-term impact, the holding cements SpaceX as a cornerstone of Alphabet’s diversified portfolio in an era where aerospace, AI, and connectivity increasingly intersect. Investors will watch closely as restrictions lift and SpaceX’s public performance unfolds.
Tesla’s Supercharger Diner probably just secured more locations
Tesla short sellers win big after shares fall after earnings
