Investor's Corner
Tesla’s (TSLA) fundamentals ‘underappreciated,’ says analyst amid canceled privatization drama
Tesla stock (NASDAQ:TSLA) is showing its trademark volatility on Monday’s early morning trading, as the company deals with the aftermath of Elon Musk’s decision to walk back on his efforts to take the company private. While the electric car maker’s shares dropped as low as 6% during Monday’s premarket, Tesla nonetheless opened at $318 per share, not too far from Friday’s $322.82 close.
Tesla’s stock has been characteristically volatile, but after Musk’s fateful tweet earlier this month when he suggested that funding was “secured” for the company going private at $420 per share, TSLA has experienced even wilder swings than usual. The company’s privatization efforts eventually came to a head on Friday night, when Elon Musk published a blog post on Tesla’s official website stating that the privatization efforts would no longer be pursued. Musk’s decision was met with strong reactions, with many Tesla supporters lauding the CEO’s decision and critics voicing out their frustrations.
Tesla’s abandonment of its go-private initiative has resulted in a wave of criticism from the company’s naysayers. Prominent short-seller Jim Chanos, who believes that TSLA is worth $0, described the company as a “corporate-governance disaster.” Jeffrey Osborne of Cowen Group noted that he sees “mounting obstacles for the company” in the near future such such shareholder lawsuits and SEC investigations over Elon Musk’s behavior.
That said, some of Tesla’s supporters on Wall Street believe that there is a silver lining to the entire go-private drama. Baird analyst Ben Kallo, for one, stated in note on Monday that Baird remains optimistic about Tesla, especially since the company’s fundamentals, which have been steadily improving, might be “underappreciated.” Kallo did admit that a potential SEC penalty would likely weigh against Tesla, though if this does happen, Elon Musk himself would probably be the one who would bear the consequences.
“We expect shares to appreciate over the intermediate term as the focus shifts back to fundamentals, which we believe may be underappreciated. We are buyers on weakness as we expect shares to move higher ahead of third-quarter deliveries and results. A potential SEC penalty will remain an overhang; while it is extremely difficult to predict the outcome of an investigation, historical settlements may demonstrate perceived risks could be overblown. Additionally, we think any penalties will likely be borne by Musk.”
Kallo still maintained his Outperform rating for Tesla, setting a price target of $411 for the electric car maker.
Oppenheimer’s Colin Rusch also maintained his Outperform rating for the company. According to the analyst, stepping away from the go-private initiative “removes a large distraction that had significant chance of failure and the potential to severely limit Tesla’s access to capital while attempting to execute on its ambitious product strategy.” RBC Capital Markets analyst Joseph Spak also noted that while Tesla and Elon Musk’s credibility have taken a hit due to the CEO’s behavior on Twitter, the firm believes that “the story will come back to the Model 3 ramp — not just the units but the profitability.”
The Model 3 ramp has been showing encouraging signs this August. Apart from Elon Musk confirming during the Q2 2018 earnings call that Tesla was able to hit a production rate of 5,000 Model 3 per week during “multiple weeks” in July, the company also passed the 100,000-mark in its VIN registrations for the electric sedan. Analysts from Evercore ISI who toured the Fremont factory also released a favorable report, stating that Tesla has the potential to ramp production to 7,000-8,000 Model 3 per week with “very little incremental capital expenditure.”
As of writing, Tesla stock is trading -3.15% at $312.73 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
