Tesla (TSLA) shares slipped after the company posted mixed Q3 results, even as CEO Elon Musk outlined big plans for the company’s future in AI and autonomous driving. Revenue rose 12% year-over-year to $28.01 billion, topping forecasts, but earnings per share of $0.50 missed the analysts’ consensus of about $0.55. Operating profit dropped 40% to $1.62 billion, weighed down by price cuts, weaker credit sales, and higher costs. While sales growth remained strong, falling margins were a major concern for investors.
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Musk Highlights Tesla’s Push into AI and Autonomy
On the earnings call, Musk focused on Tesla’s long-term push into AI and self-driving technology rather than near-term profits. “I think that Tesla has the highest intelligence density of any AI out there in the car,” he said, adding that the company is “scaling quite massively” with its Robotaxi ambitions and feels “confident in expanding future production.”
He also discussed Tesla’s new in-house AI chip, saying the “AI5 chip … will be 40× better than AI4.” However, Musk clarified that Tesla is “not about to replace Nvidia (NVDA), to be clear,” noting that the company continues to rely on Nvidia hardware for AI training and data center operations.
Investors and Analysts Cautious on Robotaxi Optimism
Despite Musk’s upbeat tone, investors were not fully convinced. Many expected clearer details on the Robotaxi rollout and regulatory progress, but Musk gave few updates, saying only that expansion could come “by the end of the year.” This left markets uneasy about how close Tesla really is to large-scale autonomy.
Analysts echoed that caution. Morningstar analyst Seth Goldstein said the market “got a little too carried away with enthusiasm for the robotaxi,” adding that a full rollout is “still a few years away.” He said hopes for a 2025 launch may be too early, given the testing and regulatory hurdles still in place.
Also, Jefferies analyst Philippe Houchois maintained a Hold rating and $300 price target after the results, calling the earnings call “more repetition than news.” He added that Tesla’s auto business “no longer drives valuation,” though it continues to generate enough free cash flow to support future AI and Robotaxi projects.
Is TSLA Stock a Buy?
Turning to Wall Street, TSLA stock has a Hold consensus rating based on 15 Buys, 13 Holds, and 10 Sells assigned in the last three months. At $366.61, the average Tesla price target implies a 16.48% downside risk. The stock has gained 75.07% over the past six months.
It must be noted that analysts may update their price targets for TSLA stock after this earnings report.
