The Number Tesla Stock Bulls Are Really Waiting for This Earnings Season Has Nothing to Do With Cars

As we approach Tesla’s (TSLA) Q2 earnings on July 22, Tesla shareholders are waiting for an update on a product that is likely to drive the company’s bull thesis in the future. While the focus has been on the deliveries and production numbers over the past decade, it is slowly shifting to a product CEO Elon Musk promised to deliver good news on by July.

We’re now past the halfway mark, and there is still no update on that front. I’m referring to Tesla’s humanoid robot Optimus. On the Q1 earnings call, Elon Musk had said that Optimus production would begin in July. This was just an approximation, so no update on this front doesn’t necessarily mean bad news. In fact, Musk himself said that the 2026 production rate would be impossible to predict. And there are good reasons for that. Tesla’s main line of business, automotive manufacturing, has enjoyed manufacturing progress for over a century now. Factories have perfected building parts that go into each vehicle. For a humanoid robot, such history does not exist. Therefore, for a company to ramp up production is no easy task.

The upcoming earnings call may be the point at which the gap between Musk’s ambitious talk and the actual output could start closing. Any update on production beginning in July or August would be positive for the stock and likely followed by a Generation 3 reveal as well. 

Tesla had reportedly informed its suppliers that it will need 1000 components per week by September, and up to 2500 per week by year-end. The disclosure did not come directly from Tesla, but even if a rumor, it could be linked to some progress on the supply chain front. The Q2 earnings report will likely confirm or deny these, and we will have more clarity, but investors are clear about one thing: the future path of the stock will not be determined by the delivery numbers. Rather, it will be the progress on the autonomy front via humanoid robots and robotaxis that will drive the company’s bull thesis.

About Tesla Stock

Tesla is a technology company that specializes in electric vehicles, energy storage, artificial intelligence, and robotics. Its product portfolio includes electric vehicles such as Model 3 and Model Y, energy products such as Powerwall and Megapack, and AI initiatives including Full Self-Driving, Robotaxi service, and the Optimus humanoid robot. Founded in 2003, the company is headquartered in Austin, Texas. 

Year-to-date (YTD), Tesla’s stock is down 17.82%, significantly underperforming the S&P 500 Index’s ($SPX) 8.73% gain during the same period. The decline is primarily driven by Tesla’s robotaxi service and Optimus humanoid robot taking longer to materialize than expected. The company’s heavy capital spending of over $25 billion in 2026 has further increased investor concerns for the near-term.

Tesla’s valuation also offers some clarity on why investors have lately been concerned. The company is trading at an extraordinary premium even by its historically rich standards. The forward GAAP price-to-earnings ratio of 287.34 times sits 89.74% above the company’s own 5-year average of 151.44 times. The forward price-to-sales ratio of 13.69 times is 30.9% higher than the 5-year average of 10.46 times. The issue is that the majority of Tesla’s market value currently rests on future businesses like robotaxi and Optimus rather than the existing car sales. With Musk reporting delays in those projects, the market is paying a steep premium while outcomes of great significance remain uncertain. The EPS growth trajectory offers some justification, with a growth of 28% expected in 2026, accelerating to over 120% in 2029. A clear strength is the company’s balance sheet, with $44.74 billion in cash against just $15.89 billion in debt. Even as the CFO expects free cash flow to turn negative this year, the financial cushion allows Tesla to fund its investment plans comfortably. However, the valuation currently remains a big risk if the Optimus and robotaxi projects continue to face delays. 

Tesla’s Strong EPS Growth Overshadowed By Rising Costs

Tesla reported its first-quarter fiscal 2026 earnings on April 22. Revenue of $22.39 billion increased 16% year-over-year (YOY). Non-GAAP EPS of $0.41 grew significantly by 52% YOY, coming in slightly ahead of expectations. CFO Vaibhav Taneja noted that the company’s core auto margins improved compared to the previous quarter, showing signs of recovery in the car business. Taneja also stated that Tesla’s Full Self-Driving software now has approximately 1.3 million paying customers globally. Most of these customers are on a subscription basis rather than making a one-time purchase. 

For the second quarter, the management raised its 2026 capital expenditure guidance to more than $25 billion. To put the scale into perspective, this is roughly three times what Tesla spent in 2025. The CFO has confirmed that the heavy spending means that the free cash flow would turn negative for the remaining three quarters of the year. Most of this spending is directed towards Optimus, the robotaxi rollout, and AI infrastructure. However, the investors remain concerned about when these projects will start generating returns. CEO Elon Musk expects Optimus production to begin around late July or August, while admitting that the number of units that can be built this year remains unclear. He also said that robotaxi revenue will only become meaningful in 2027. 

What Are Analysts Saying About Tesla Stock?

So far in July, three financial services firms have raised their price targets on the stock. These include RBC Capital, UBS, and Jefferies. Among all three firms, RBC Capital has the highest price target of $500, up from $475. Moreover, the firm also maintained its “Buy” rating on the stock on July 7. In contrast to RBC Capital, UBS and Jefferies both firms reiterated their “Hold” ratings on the stock while raising their price targets. Jefferies and UBS increased their price targets on the shares from $375 and $364 to $400 and $442, respectively. 

According to 43 Wall Street analysts covering the stock, it carries a consensus "Moderate Buy" rating. Based on their estimates, Tesla has an average price target of $418.06, indicating a 13.12 upside potential. However, the highest price target of $600 implies an attractive 62.4% upside from current levels.