Tesla Stock Fell 15% Thursday. Here’s What Could Drive It Through 2026

Key Stats for Tesla Stock

• Thursday’s Performance: -15%
• 52-Week Range: $298 to $499
• Valuation Model Target Price: Around $290
• Implied Downside: Around 9%

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What Happened?

Tesla has spent much of 2026 asking investors to look beyond its electric-vehicle business and focus on its future in autonomous driving, artificial intelligence, and robotics. That long-term narrative collided with weak near-term economics Thursday as Tesla stock fell 15% to around $320. The selloff reversed much of the optimism surrounding Tesla’s record second-quarter deliveries as investors questioned how long the company must invest before Robotaxi, Full Self-Driving, and Optimus generate meaningful profits.

Tesla stock dropped because record second-quarter deliveries failed to translate into stronger profits or cash flow while spending on factories and artificial intelligence accelerated. Revenue increased 26% to $28.24 billion and deliveries rose 25% to 480,126 vehicles, but adjusted EPS of $0.33 missed expectations. Operating income fell 57% to $398 million, while operating margin declined to 1.4% from 4.1% as lower vehicle pricing, reduced regulatory-credit revenue, and higher research spending pressured profitability. Regulatory credits are payments Tesla receives from other automakers that need help complying with emissions rules. Capital expenditures surged 142% to $5.79 billion, pushing free cash flow, the cash remaining after those investments, to negative $1.09 billion. Tesla’s official Q2 update

During this week’s earnings call, Tesla reported 1.48 million active Full Self-Driving subscriptions, a company metric that includes upfront purchases and monthly subscriptions, while deployments of its large battery-storage systems increased 53% sequentially to 13.5 GWh. Full Self-Driving is Tesla’s supervised driver-assistance software, while Robotaxi is its autonomous ride-hailing service and Cybercab is the purpose-built vehicle designed for that network. Robotaxi was live in seven major metropolitan areas, Cybercab production began at Gigafactory Texas, and Tesla continued developing Optimus, its humanoid robot. CFO Vaibhav Taneja said Tesla is in a “big investment cycle,” with 2026 capital spending expected to exceed $25 billion as the company funds these programs, semiconductor manufacturing, solar production, and AI infrastructure.

Tesla faces BYD and Rivian in electric vehicles and Alphabet’s Waymo in autonomous ride-hailing. Based on BYD’s official sales data, the Chinese automaker sold around 557,000 battery-electric passenger vehicles during Q2, approximately 16% more than Tesla’s 480,126 deliveries. Rivian delivered 12,194 vehicles and raised its 2026 delivery outlook to between 65,000 and 70,000. Waymo had accumulated approximately 221 million rider-only miles without a human driver through March 2026, showing that Tesla’s Robotaxi service remains early relative to a more established operator. Waymo’s safety data

Analysts also became more cautious following the results. Morgan Stanley lowered its price target to $400 from $417, UBS cut its target to $385 from $442, and Canaccord Genuity reduced its target to $410 from $450. RBC maintained its $500 target, showing that some analysts still assign substantial value to Tesla’s autonomy and robotics opportunities despite the near-term pressure on profitability.

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Is Tesla Stock Overvalued?

Under a more conservative valuation scenario, Tesla stock is modeled using:

• Revenue Growth (CAGR): Around 14%
• Operating Margins: Around 9%
• Exit P/E Multiple: Around 80x

The 14% average annual revenue-growth assumption requires energy storage, Full Self-Driving, and Robotaxi services to grow faster than Tesla’s automotive business.

The 9% operating-margin assumption is a longer-term model input, not a 2026 forecast. As the chart shows, analysts expect Tesla’s EBIT to increase from around $4 billion in 2025 to nearly $40 billion by 2030, while its EBIT margin rises from around 5% in 2026 to approximately 18% by 2030. The model’s 9% margin assumption therefore sits between Tesla’s near-term profitability and analysts’ longer-term expectations.

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The 80x exit P/E still gives Tesla a substantial technology premium and means investors would pay approximately $80 for every $1 of annual earnings, leaving the valuation dependent on meaningful progress in autonomy, robotics, and energy.

Based on these assumptions, the model estimates Tesla stock could reach around $290 over the next two and a half years, implying approximately 9% downside from around $320 and an annualized loss of around 4%.

Over the next 12 months, stronger Full Self-Driving adoption, wider Robotaxi availability, Cybercab production, and continued energy-storage growth could improve the outlook, but weak margins and more than $25 billion of planned capital spending leave Tesla looking slightly overvalued.

How Much Upside Does TSLA Stock Have From Here?

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