Earnings Report Preview | Wall Street "Bull and Bear" Divergence Intensifies, Can Musk's "Vision" Save Tesla's Stock Price?

According to the Zhitong Finance APP, Tesla (TSLA.US), a global leader in electric vehicles and autonomous driving technology, plans to announce its second-quarter results after the U.S. stock market closes on Wednesday, Eastern Time. Earlier this month, Tesla disclosed delivery numbers that fell short of analysts' expectations. According to Wall Street rating data, analysts have mixed views on Tesla's stock, with the highest bullish target price reaching $500 and the lowest target price just above $100. The overall target price indicates that most analysts expect a significant decline in the stock price.

For believers in a bullish Tesla stock price, if CEO Elon Musk can passionately "paint a picture" during the earnings call, especially regarding the progress of Tesla's AI supercomputer-driven Full Self-Driving (FSD), Robotaxi real-world testing, and the latest technological breakthroughs or development roadmap for the "Optimus" humanoid robot, it could potentially bring a strong short-term or medium-term rebound for Tesla's recently depressed stock price due to Musk's ongoing political confrontation with Trump.

Musk has proven his ability to "paint a picture" multiple times during earnings calls. In one meeting a year ago, he revealed the latest progress on FSD and humanoid robots, which not only drove Tesla's stock price to rise to its highest point of the year over several consecutive trading days but also significantly boosted the global autonomous driving industry chain and robotics-related sectors.

Regarding the second-quarter results, there may not be any highlights. Investors and Wall Street analysts are not focused on the actual performance of the second quarter but are instead concentrated on the outlook for Tesla's performance or any technical guidance regarding autonomous driving and robotics that Musk will reveal during the earnings call.

According to expectations compiled by Visible Alpha from Wall Street analysts, Tesla is expected to report a 10% year-over-year decline in total revenue for the second quarter, down to $22.9 billion, while adjusted earnings per share are expected to decline nearly 20% year-over-year to just $0.43 per share.

The Discrepancy on Wall Street is So Large

Before this electric vehicle manufacturer announces its results, Wall Street's overall outlook on Tesla's fundamentals and stock price is leaning towards pessimism. However, the optimists are "extremely bullish" on Tesla, with a stark polarization in their expectations regarding Tesla's valuation and fundamentals.

The UBS analyst team recently stated that they still believe Tesla is "fundamentally significantly overvalued" and maintained a bearish target price of only $215 for the next 12 months, far below Friday's closing stock price of about $327.

Analysts from the international bank UBS warned that they believe the stock price direction may be more influenced by CEO Musk's comments during the earnings call regarding the recently launched Robotaxi road testing program, FSD update outlook, and other technical projects such as the "Optimus" AI humanoid robot (i.e., Optimus AI humanoid robot), rather than Tesla's actual second-quarter performance.

JPMorgan analysts hold a more pessimistic view, with the institution providing the most bearish target price—setting a Wall Street low target price of $115. They pointed out that "Tesla's full-year performance outlook and valuation still carry risks," mainly because Tesla's delivery numbers may continue to decline In contrast, analysts from Wedbush are much more optimistic, with a 12-month target price as high as $500— the highest target price on Wall Street, highlighting the significant divergence in Wall Street's outlook on Tesla's stock price. Analysts from Wedbush expect that delivery volumes will not decline sharply as some analysts are concerned, noting that Tesla achieved its first year-on-year sales growth in China in June after eight months.

Earlier this month, analysts from William Blair downgraded Tesla's stock rating from "outperform" to "market perform," primarily because investors may be "very weary of Musk's involvement in U.S. politics." The firm also stated that the Trump administration's termination of electric vehicle tax credits and penalties (which previously prompted other automakers like Ford to purchase clean energy credits from Tesla) could affect demand for Tesla vehicles and significantly harm its actual profit margins.

Among the 17 major Wall Street investment firms tracked by Visible Alpha, 8 firms rated Tesla as "buy," 5 as "hold," and 4 as the most pessimistic rating— "sell." Their overall average target price is slightly below $300, about 9% lower than Friday's stock price. Since the beginning of this year, the stock has fallen nearly one-fifth, making it the worst performer among the "Magnificent 7" tech giants for 2025.

Tesla's future relies on Robotaxi and robots?

Compared to Musk's "big dreams," Google's autonomous driving subsidiary Waymo has made significant progress in the fully autonomous taxi sector based on driverless models, which is much faster than Tesla's Robotaxi, which is still in the realm of imagination and planning. Waymo is already ahead of Tesla in terms of the maturity of autonomous driving technology and actual commercialization.

The good news for Tesla is that Robotaxi has already begun small-scale testing in Austin, Texas, and has completed its first fully autonomous delivery of a Model Y from the factory to a customer's home—this is Tesla's latest initiative aimed at showcasing its technology in the autonomous driving field as being among the best in the world.

Tesla has officially launched its fully driverless Robotaxi service with safety supervisors in Austin, Texas, deploying around 10 refreshed Model Y vehicles as the first fully driverless taxis to pick up and drop off the first passengers. More Robotaxi service vehicles, such as the Cybercab, are expected to join Tesla's autonomous taxi fleet and further expand the operational range.

Recently, Musk stated in an interview that Tesla will start testing with a "very small scale" of about 10 to 20 Robotaxis, equipped with the new "unsupervised" version of Tesla's FSD (Full Self-Driving) system. The first tests will use the Model Y, rather than the CyberCab, which is expected to go into mass production next year and features a "sci-fi punk style." Robotaix is an important force supporting the new long-term bull market narrative for Tesla. Recently, Morgan Stanley, a Wall Street financial giant known as a "super bull" on Tesla, once again issued a very strong bullish research report on Tesla, maintaining an "Overweight" rating on Tesla stock and reaffirming the long-held target price of $410.

Morgan Stanley's long-term bullish logic on Tesla is based on the deep penetration of the FSD autonomous driving system, the fully autonomous Robotaxi network, and the immensely large AI humanoid robot business (i.e., Optimus AI humanoid robot)—Morgan Stanley predicts that the robot market size could far exceed the current global automotive market. Last week, Musk stated on social media platform X that the "Optimus" humanoid robot will have an "epic shock" demonstration before the end of the year, revealing that the agility of Optimus 2.5 and 3 will be roughly equivalent to that of an agile human.

As one of Tesla's most steadfast bulls, Cathie Wood stated in March that Tesla's stock price will reach $2,600 within five years—almost nine times its current price. She believes that Tesla's core value will come from the fully autonomous Robotaxi business, accounting for 90% of the company's overall valuation. Research reports from Wood's ARK Investment indicate that by 2030, the fully autonomous taxi market is expected to reach $10 trillion. At that time, the number of autonomous taxis is expected to reach about 50 million, with Tesla's Robotaxi potentially capturing about 50% of the market share