Musk's Warning Could Spoil Tesla's Buy-The-Dip Moment
Tesla Inc. reported a challenging quarter with a 12% revenue drop to $22.5 billion and a 16% decline in net income. CEO Elon Musk warned of potential rough quarters ahead, causing shares to fall 6%-9% in after-hours trading. Despite this, some investors see a buying opportunity, citing Tesla's long-term AI and autonomy goals. Analysts remain cautious but optimistic about the stock's future, with options traders anticipating significant price movements. Musk's caution highlights the reality of short-term challenges, but long-term investors may find this dip a strategic entry point.
Tesla Inc TSLA just delivered one of its toughest earnings in years. Second quarter revenue dropped 12% to $22.5 billion, and net income plunged 16%, while vehicle deliveries fell 13.5% year-over-year.
Tesla's shares slumped 6%–9% in after-hours and pre-market trading after CEO Elon Musk cautioned the company could face "a few rough quarters" as the $7,500 federal EV tax credit ends and tariffs bite. Tesla stock plummeted over 9% in early trading on Thursday.
Track Tesla stock’s volatile price movements here.
Musk described it as part of a "weird transition period" before autonomy and robotaxi revenue begin to offset losses.
Read Also: Gene Munster Says Tesla’s Cheaper Model Y Is Like Apple’s iPhone Strategy — But Warns It May Cannibalize Sales
Trending Investment Opportunities
The Dip Tempts Value Hunters
Despite the headwinds, some bulls see opportunity. Tesla's long-term AI and autonomy ambitions — fueled by Dojo, Optimus, and now Robotaxi — remain intact. And with the stock still up ~60% from April's lows, the recent weakness could simply be a reset before another leg higher, particularly if Robotaxi Day includes even modest surprises.
Wedbush's Dan Ives remains confident in the long-term thesis, calling the dip a "pushback, not a pivot." Ives, while cautious, called the stock "rangebound" for now but reaffirmed the long-term AI thesis. Meanwhile, options traders are already betting on a major post-earnings move — implying over 10% swing potential in either direction.
What's Priced In and What Else Might Matter
Tesla's valuation at ~60× forward earnings now reflects a significant premium and risk. Musk's guidance shift, combined with macro pressures — tariffs, incentive loss and policy uncertainty — have clearly rattled investors . Yet, if Tesla can deliver modest margin resilience or bring Robotaxi news sooner than expected, this dip might prove premature.
Tesla's stock may feel like a rollercoaster, but it's no accident. Musk's caution reminds investors that short-term softness is a reality, not just headline noise. For bulls betting on autonomy and autonomy-led economics by late 2026, this dip might be a strategic entry. But only if patience and execution hold up.
Tesla remains a high-volatility, high-conviction trade — embrace only if you believe in the long game.
- As Elon Musk, Mark Zuckerberg, Sam Altman Chase Nvidia AI Chips, Jensen Huang Says ‘Just Call Me’ — Here’s How Allocation Really Works
Photo: Shutterstock
