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Wall St. sends Tesla (TSLA) stock soaring 10% amid renewed confidence in profitability

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Tesla shares (NASDAQ:TSLA) are rallying after the electric car maker beat Wall Street’s revenue estimates by posting $4 billion in revenue, consisting of $3.36 billion from its automotive business and $374 million from its energy and battery storage division. Topped off by a successful earnings call that seemingly restored investors’ positive sentiments towards the company, Tesla appears to have finally hit a turning point in its struggle to achieve profitability.

Tesla’s second-quarter earnings call saw a more restrained Elon Musk. During the Q&A session, Musk stated that Tesla would start showing profits each quarter going forward, while maintaining that the company would not need an equity capital raise. Musk and Tesla’s executives also noted that high-profile projects, such as Gigafactory 3 in Shanghai, would not have as much CapEx as its other facilities like Gigafactory 1 in Nevada. According to CTO JB Straubel, the lessons that Tesla learned in its US facilities over the years will be applied to all of the company’s future projects.

“We found a surprising amount of ways to improve efficiency and speed and density as well in Gigafactory 1. And all those lessons will absolutely be shared with Gigafactory 3. The teams are already, of course, beginning to collaborate and start to do this more efficiently with less cutbacks than last time,” Straubel said.

The company’s encouraging numbers and positive earnings call aside, one thing that truly stood out was Musk’s apology to Wall Street analysts Toni Sacconaghi from Bernstein and Joseph Spak of RBC Capital Markets, who were cut off during the first-quarter earnings call. Musk noted that while he was incredibly tired then, there was “no excuse” for his behavior.

Coupled with the company’s better-than-expected financials, Musk’s apologetic, humble behavior in the earnings call appears to have rejuvenated investors’ sentiment about the company. During after-hours trading on Wednesday, Tesla stock surged 8.5%, adding about $4.75 billion the company’s market cap. On Thursday’s pre-market, Tesla stock was up 8%, maintaining its momentum. In a note to clients on Wednesday, Keybanc analyst Brad Erickson dubbed Musk’s apology as “maybe the most valuable apology of all time.”

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“Elon Musk apologized multiple times for his inappropriate behavior on last quarter’s call. TSLA’s forward commentary was mostly better than feared and the CEO worked to restore some faith and credibility with investors that he can be a plus to the investment narrative, not a minus,” Erickson wrote.

While Tesla’s earnings of -$3.06 per share were slightly worse than analyst estimates of -$2.92 per share, Piper Jaffray analyst Alexander Potter stated in a note to clients on Wednesday that Q2 2018 could be a turning point for the company. Potter also raised his price target for TSLA to $389 from $369, representing 29% upside to Wednesday’s close.

“This could be the start of something big. A few years from now, investors may conclude that 2Q18 was the quarter in which Tesla cemented its position as a truly formidable player in the global automotive market,” the analyst said.

Even Goldman Sachs, which has a Sell rating on Tesla stock, admitted that the second quarter was “solid” for the electric car maker, considering that automotive gross margins, cash burn, and ending cash balance were better than expected.

“This was a positive quarter. Automotive gross margins, cash burn, and ending cash balance were better than expected. In addition, the company may have turned the corner on its historical operational misexecution. We see the second quarter as a positive step for Tesla as a manufacturing organization, but a step that requires continued forward momentum in cost control, operating efficiency, and ultimately positive cash flow.”

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Tesla stock opened strong on Thursday, up 9.22% and trading at $328.44 per share.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Investor's Corner

Tesla could save $2.5B by replacing 10% of staff with Optimus: Morgan Stanley

Jonas assigned each robot a net present value (NPV) of $200,000.

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Credit: Tesla Optimus/X

Tesla’s (NASDAQ:TSLA) near-term outlook may be clouded by political controversies and regulatory headwinds, but Morgan Stanley analyst Adam Jonas sees a glimmer of opportunity for the electric vehicle maker. 

In a new note, the Morgan Stanley analyst estimated that Tesla could save $2.5 billion by replacing just 10% of its workforce with its Optimus robots, assigning each robot a net present value (NPV) of $200,000.

Morgan Stanley highlights Optimus’ savings potential

Jonas highlighted the potential savings on Tesla’s workforce of 125,665 employees in his note, suggesting that the utilization of Optimus robots could significantly reduce labor costs. The analyst’s note arrived shortly after Tesla reported Q2 2025 deliveries of 384,122 vehicles, which came close to Morgan Stanley’s estimate and slightly under the consensus of 385,086.

“Tesla has 125,665 employees worldwide (year-end 2024). On our calculations, a 10% substitution to humanoid at approximately ($200k NPV/humanoid) could be worth approximately $2.5bn,” Jonas wrote, as noted by Street Insider.

Jonas also issued some caution on Tesla Energy, whose battery storage deployments were flat year over year at 9.6 GWh. Morgan Stanley had expected Tesla Energy to post battery storage deployments of 14 GWh in the second quarter.

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Musk’s political ambitions

The backdrop to Jonas’ note included Elon Musk’s involvement in U.S. politics. The Tesla CEO recently floated the idea of launching a new political party, following a poll on X that showed support for the idea. Though a widely circulated FEC filing was labeled false by Musk, the CEO does seem intent on establishing a third political party in the United States. 

Jonas cautioned that Musk’s political efforts could divert attention and resources from Tesla’s core operations, adding near-term pressure on TSLA stock. “We believe investors should be prepared for further devotion of resources (financial, time/attention) in the direction of Mr. Musk’s political priorities which may add further near-term pressure to TSLA shares,” Jonas stated.

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Two Tesla bulls share differing insights on Elon Musk, the Board, and politics

Two noted Tesla bulls have shared differing views on the recent activities of CEO Elon Musk and the company’s leadership.

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Credit: Tesla

Two noted Tesla (NASDAQ:TSLA) bulls have shared differing views on the recent activities of CEO Elon Musk and the company’s leadership.

While Wedbush analyst Dan Ives called on Tesla’s board to take concrete steps to ensure Musk remains focused on the EV maker, longtime Tesla supporter Cathie Wood of Ark Invest reaffirmed her confidence in the CEO and the company’s leadership.

Ives warns of distraction risk amid crucial growth phase

In a recent note, Ives stated that Tesla is at a critical point in its history, as the company is transitioning from an EV maker towards an entity that is more focused on autonomous driving and robotics. He then noted that the Board of Directors should “act now” and establish formal boundaries around Musk’s political activities, which could be a headwind on TSLA stock. 

Ives laid out a three-point plan that he believes could ensure that the electric vehicle maker is led with proper leadership until the end of the decade. First off, the analyst noted that a new “incentive-driven pay package for Musk as CEO that increases his ownership of Tesla up to ~25% voting power” is necessary. He also stated that the Board should establish clear guidelines for how much time Musk must devote to Tesla operations in order to receive his compensation, and a dedicated oversight committee must be formed to monitor the CEO’s political activities.

Ives, however, highlighted that Tesla should move forward with Musk at its helm. “We urge the Board to act now and move the Tesla story forward with Musk as CEO,” he wrote, reiterating its Outperform rating on Tesla stock and $500 per share price target.

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Tesla CEO Elon Musk has responded to Ives’ suggestions with a brief comment on X. “Shut up, Dan,” Musk wrote.

Cathie Wood reiterates trust in Musk and Tesla board

Meanwhile, Ark Investment Management founder Cathie Wood expressed little concern over Musk’s latest controversies. In an interview with Bloomberg Television, Wood said, “We do trust the board and the board’s instincts here and we stay out of politics.” She also noted that Ark has navigated Musk-related headlines since it first invested in Tesla.

Wood also pointed to Musk’s recent move to oversee Tesla’s sales operations in the U.S. and Europe as evidence of his renewed focus in the electric vehicle maker. “When he puts his mind on something, he usually gets the job done,” she said. “So I think he’s much less distracted now than he was, let’s say, in the White House 24/7,” she said.

TSLA stock is down roughly 25% year-to-date but has gained about 19% over the past 12 months, as noted in a StocksTwits report.

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Cantor Fitzgerald maintains Tesla (TSLA) ‘Overweight’ rating amid Q2 2025 deliveries

Cantor Fitzgerald is holding firm on its bullish stance for the electric vehicle maker.

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Credit: Tesla China

Cantor Fitzgerald is holding firm on its bullish stance for Tesla (NASDAQ: TSLA), reiterating its “Overweight” rating and $355 price target amidst the company’s release of its Q2 2025 vehicle delivery and production report. 

Tesla delivered 384,122 vehicles in Q2 2025, falling below last year’s Q2 figure of 443,956 units. Despite softer demand in some countries in Europe and ongoing controversies surrounding CEO Elon Musk, the firm maintained its view that Tesla is a long-term growth story in the EV sector.

Tesla’s Q2 results

Among the 384,122 vehicles that Tesla delivered in the second quarter, 373,728 were Model 3 and Model Y. The remaining 10,394 units were attributed to the Model S, Model X, and Cybertruck. Production was largely flat year-over-year at 410,244 units.

In the energy division, Tesla deployed 9.6 GWh of energy storage in Q2, which was above last year’s 9.4 GWh. Overall, Tesla continues to hold a strong position with $95.7 billion in trailing twelve-month revenue and a 17.7% gross margin, as noted in a report from Investing.com.

Tesla’s stock is still volatile

Tesla’s market cap fell to $941 billion on Monday amid volatility that was likely caused in no small part by CEO Elon Musk’s political posts on X over the weekend. Musk has announced that he is forming the America Party to serve as a third option for voters in the United States, a decision that has earned the ire of U.S. President Donald Trump. 

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Despite Musk’s controversial nature, some analysts remain bullish on TSLA stock. Apart from Cantor Fitzgerald, Canaccord Genuity also reiterated its “Buy” rating on Tesla shares, with the firm highlighting the company’s positive Q2 vehicle deliveries, which exceeded its expectations by 24,000 units. Cannacord also noted that Tesla remains strong in several markets despite its year-over-year decline in deliveries.

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