Investor's Corner
What to look for in Tesla Motors Q1 Financials
Tesla (NASDAQ: TSLA) is set to announce its first quarter earnings report after market close on Wednesday, May 4, 2016.
TSLA reported 4th quarter 2015 earnings of $ -0.87 per share on February 10, 2016. This missed the consensus of $ 0.10 by $ -0.97 of the 16 analysts covering this company. Interestingly that turned out to be the end of a dramatic 42% slide which began on January 1st. Since then TSLA has moved from its lowest point of $141 on that day to roughly $250 per share, a 78% increase in just 3 months. That kind of tells you that TSLA is a stock not for the faint of heart.
The consensus of the 14 analysts covering TSLA for 1st quarter 2016 is a per share loss of $ -.57, with range estimates of: 0.080 | -0.569 | -1.000 (High | Mean | Low).
Based on 20 analysts offering 12-month targets from TSLA, the average price target is $243.95, effectively a zero-move from the current stock price. If you are an “investor” in TSLA stock, the pros tell you that TSLA will not go anywhere in the next 12 months.
So those are the numbers from the pros, but if you still decide that you want to trade TSLA stock, what should you be looking for in the quarterly results and the conference call webcast?
Q1 Vehicle Deliveries
Let’s take a look at a few items from the “Tesla 4th Quarter & Full year 2015 Shareholder Letter”.
In the “Q1 and Full Year 2016 Outlook” section, Tesla states that “we plan to deliver 80,000 to 90,000 new Model S and Model X vehicles in 2016. […] In Q1, we plan to grow deliveries 60% year on year to approximately 16,000 vehicles”.
We already know that Q1 deliveries did not meet the promised 16,000 units, as that number was actually 14,820, due to “severe Model X supplier parts shortages in January and February” as provided in a Press Release on April 4, 2016. In the same release, “Tesla reaffirms its full-year delivery guidance [of 80,000 to 90,000 vehicles].”
The missing income due to the delayed Model X vehicles delivery will be partially offset by the initial Model 3 “reservations”. It is quite interesting that reservations opened on March 31, 2016, the last day in the quarter, and at least 125,000 of them may be counted as an additional $125M income in Q1. In the end, guidance on vehicle deliveries for Q2 2016 will be one of the deciding factors on where TSLA stock moves post the Q1 report.
Cash Flow and Margins
In the same Q4 Shareholder Letter, Tesla states that “we expect to generate positive net cash flow and achieve non-GAAP profitability for the full-year 2016”, and “we plan to fund about $1.5 billion in capital expenditures without accessing any outside capital.” These are both very aggressive goals, especially in light of the 400,000+ Model 3 reservations, as of the latest disclosed counts. Elon Musk has already tweeted that he is “definitely going to need to rethink production plans”, which likely means that another factory will be needed to produce the Model 3 in a reasonable timeline that will allow delivery to the majority of the current reservation holders. This more aggressive delivery of Model 3 vehicles as originally envisioned will likely require outside capital for building such factory.
Definitely going to need to rethink production planning…
— Elon Musk (@elonmusk) April 1, 2016
Since missing the mark on Model X will impact cash flow for Q1, I would expect questions in the conference call asking if the issues have been resolved, and if the missing Model X numbers can be made up in Q2. While cash flow reversed action to the positive for the first time during Q4 2015, with a strong $179M cash flow from core operations, Tesla needs to prove that this behavior will continue in 2016.
Again in the Q1 Shareholder Letter, Tesla states that “Throughout the rest of 2016, Automotive gross margins should continue to increase. […] Model S gross margins should begin to approach 30% and Model X gross margins should be about 25%.” In Q4 gross margins were 20.9% for the Tesla Model S and even a slight increase in margins will be viewed positively by the market. This is a number that will be greatly watched as Tesla needs to prove that it can eventually deliver 500K+ vehicles / year at a profit. Much of the current valuation of Tesla stock is built on this assumption. Accordingly, a drop in margins for Q1 would be viewed very negatively by the market, at least for the short term.
Summarizing, besides vehicle delivery, cash flow and margins will be the other two drivers of the TSLA stock short-term market action after the Q1 report numbers are released.
Live Q&A Webcast
Tesla management will hold a live question & answer webcast on May 4 at 2:30pm Pacific Time to discuss the Company’s financial and business results and outlook. Live and replay webcast will be available at http://ir.teslamotors.com/eventdetail.cfm?EventID=171952 .
Tip of the Week
Starting with today’s posting I’ll be including a “tip of the week.” This may involve covering a trading concept, or recommending a website with tools or information useful to investors and traders of TSLA.
For this week, I am recommending signing up for the free Basic Membership of TipRanks. With it you can receive free alerts for 1 stock and 1 expert, which is enough for the ones just interested in TSLA stock. Happy trading.
Disclosure: I currently have no positions in any stocks mentioned, but I may plan to initiate positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Teslarati). I have no business relationship with any company whose stock is mentioned in this article.
Elon Musk
Nvidia’s board meets on Jensen Huang, and Elon Musk already has an answer
Elon Musk says it would be an honor to hire Jensen Huang amid Nvidia turmoil.
Elon Musk says he would welcome Jensen Huang at one of his companies if Nvidia’s board decides to push out its longtime chief executive.
On Wednesday evening, the financial account ZeroHedge posted “Elon please hire Jensen” on X. Musk replied roughly two hours later: “That would be an honor.” Neither Huang nor Nvidia had responded publicly as of Wednesday night.
Musk’s reply came as Nvidia’s board met to decide Huang’s future. The Wall Street Journal reported that directors were preparing to oust him following reports of two extramarital relationships. One involves Alice Huang, a Singapore-based businesswoman whom U.S. intelligence officials reportedly believe was working for China’s Ministry of State Security. The New York Times separately reported a relationship with Kimberly Powell, Nvidia’s vice president of health care. Huang acknowledged being unfaithful in a memo to employees on Sunday but gave no details.
@zerohedge That would be an honor
— Elon Musk (@elonmusk) November 12, 2026
Under Nvidia’s bylaws, a majority of its 11 directors can remove the CEO with or without cause. Bloomberg reported that the board has been working with an outside firm on possible replacements and may name an interim chief, with CFO Colette Kress seen as the likely pick. Nvidia shares fell more than 8 percent in extended trading, according to CNBC, and the company is scheduled to report quarterly earnings on November 17.
Musk has more riding on Nvidia’s leadership than most tech executives. In August, he told investors on SpaceX’s first earnings call as a public company that it would build its AI infrastructure exclusively on Nvidia hardware, calling Vera Rubin “the best architecture.” SpaceX is also working with Nvidia on the compute payload for Starmind, its planned orbital AI constellation. In October, SpaceX said it had a binding commitment for a roughly $40 billion lease of Vera Rubin GPUs and related equipment, with the leases expected to begin in the first half of 2027.
The scale of that dependence is already enormous. On its Q3 call, SpaceX said it was bringing roughly 200,000 to 220,000 Nvidia GB300 GPUs online each month and expects 2.5 to 3 GW of nameplate compute by the end of the year. That buildout is now reaching new sites like the proposed $24 billion power plant and supercomputer campus at Starbase.
The relationship between the two executives also goes back nearly a decade. Huang has often told the story of personally delivering Nvidia’s first DGX-1 AI supercomputer to Musk in 2016, when no other customer wanted one. “Nobody wanted to be part of it, except for Elon,” Huang said on the Joe Rogan Experience last December.
Musk did not say what role Huang might fill, and his reply stops short of a formal offer. Huang co-founded Nvidia in 1993 and still owns about 3.6 percent of its stock, so any move to a Musk company would depend on whether, and how, he leaves the chipmaker he has run for more than three decades.
Elon Musk
SpaceX’s Anthropic deal has a catch, and Elon Musk just addressed it
Elon Musk says SpaceX’s Anthropic compute deal cuts both ways after Chamath floats higher prices.
Elon Musk pushed back on Sunday against the idea that SpaceX’s compute contract with Anthropic is a one way bet, after venture capitalist Chamath Palihapitiya argued the company could use a termination clause to charge the AI lab far more.
“It works both ways, of course. If compute becomes plentiful and cheap, SpaceX revenue will drop. No crying in the casino for either party,” Musk wrote on X Sunday evening, replying to a clip of Palihapitiya’s comments shared by AI commentator Rohan Paul.
On the All-In podcast released Sunday, Palihapitiya said either side can walk away from the agreement on 90 days’ notice. If data center supply tightens, he argued, SpaceX could exercise that option and bring the contract back at two to three times the current price, and Anthropic would have little choice but to accept. He called it “the kingmaking move,” according to BigGo Finance.
The clause itself is not new. SpaceX disclosed in its IPO filings in May that Anthropic would pay $1.25 billion per month for dedicated capacity at its Colossus clusters through May 2029, nearly $45 billion in total, with both companies able to terminate on 90 days’ notice, as Teslarati reported at the time. SpaceX’s later compute deals with Google and Reflection AI carry similar exit terms.
What has changed is the political backdrop. Palihapitiya’s thesis rests on incoming Democratic governors pulling tax incentives for data centers and slowing new construction. In Texas, Gov.-elect Gina Hinojosa campaigned on a moratorium on new data center approvals, and Deutsche Bank analysts warned last week that SpaceX’s Texas compute capacity could face delays. SpaceX and Tesla shares both fell after the midterm results.
A slowdown would favor companies that already own capacity. SpaceX acquired xAI in February and has been renting data centers to outside AI labs before the space is needed for Grok. At the Baron Investment Conference on Friday, Musk said SpaceX was “getting 50 billion a year for 35 billion dollar investments” and that it can bring a data center online in eight or nine months, compared to two and a half years for competitors. He also said SpaceX is tracking toward an annualized revenue rate above $100 billion in December, with a “best guess” of $500 billion by December 2027.
Musk’s reply points to the other side of the clause. Anthropic has signed large compute agreements with Amazon, Google and Microsoft, and if that capacity comes online faster than new construction slows, the AI lab would have its own leverage to renegotiate or leave. Musk has called Anthropic “obviously currently the leader in AI,” and it remains one of SpaceX’s largest compute customers.
SpaceX shares rose more than 2 percent in overnight trading late Sunday after closing Friday at $134.27, according to Stocktwits.
Investor's Corner
Musk’s Tesla and SpaceX decline after Democratic Midterm sweep
Tesla and SpaceX shares fell on Wednesday after Democrats swept both chambers of Congress. The decline stood out as broader market securities recovered and turned positive, while both of Musk’s publicly traded companies lagged.
CEO Elon Musk already joked about the unsuccessful campaigning for the Republicans, but now the new party will make pretty drastic changes to how it handles Tesla and SpaceX, and those companies will adjust their outlook.
Let’s take a deeper look.
Tesla ($TSLA)
Tesla shares traded lower during the regular session after Democrats secured both the House and Senate. The stock was down 2.32 percent at around 1:45 p.m. on the East Coast, trading at around $389.30.
The pressure is tied to more than the raw scale of Musk’s political spending, estimated at $450–474 million this cycle with roughly $224 million directed at Texas. In that state, Tesla now faces a Democratic governor and a Democratic senator after Gina Hinojosa unseated Greg Abbott and James Talarico defeated Ken Paxton.
The Austin Gigafactory, Robotaxi pilot programs in multiple Texas cities, and any related AI compute expansion sit under a new state executive who campaigned against certain corporate subsidies and floated a moratorium on new data-center construction.
Federally, Democratic control of key committees opens the door to deeper examination of Tesla’s autonomous-driving safety record, federal energy-storage and manufacturing incentives, and the national-security implications of any combination with SpaceX.
Investors are also weighing whether the company’s historically close alignment with the prior Republican leadership will invite slower permitting, additional hearings, or tighter rules on Full Self-Driving deployment.
For Tesla, the political shift adds near-term friction around state permitting and federal regulatory approvals for autonomy and energy storage. A potential merger with SpaceX may face slower review even if it proceeds.
Core growth drivers such as vehicle deliveries, energy deployments, and robotaxi rollout remain intact, yet the stock now carries a higher political-risk premium that could weigh on valuation until the company demonstrates workable relationships with the new Texas leadership and congressional majorities.
SpaceX ($SPCX)
SpaceX shares also declined in live trading on November 4 following the Democratic midterm sweep. The stock traded at $134.97, down 4.49 percent. The drop occurred even as broader indexes stabilized, highlighting a company-specific reaction to the election outcome.
Musk’s large contributions, concentrated in Texas races that both companies lost, place SpaceX’s Starbase launch facility and headquarters under a new Democratic governor.
At the federal level, Democratic control of Congress enables greater scrutiny of NASA, the Department of Defense, and other contracts that support a meaningful share of revenue, along with reviews of Starlink national-security uses and any Tesla merger. Analysts have noted that empowered committees can hold hearings and request documents on these relationships.
For SpaceX, the results raise the risk of delayed contract awards, higher compliance costs, and tighter constraints on AI and satellite infrastructure expansion, particularly in Texas where a data-center moratorium has been discussed.
A merger with Tesla could encounter political friction that slows integration of launch, connectivity, and autonomy capabilities.
While Starlink growth and launch cadence continue as primary drivers, the company faces a more contested path for federal funding and state-level operations, requiring management to rebuild ties with the new congressional majorities and Texas leadership to limit the overhang.



