Tesla stock ends earnings week up 4.9%: a merger-fuelled rally, then a post-results slide

It was one of the busiest weeks of the year for Tesla shareholders: a possible merger with SpaceX, third-quarter results and a long earnings call. Despite the drama, the stock finished the week higher. Tesla closed Friday, October 23, at $372.22, up 4.9% from the previous Friday's close of $354.72.

The weekly gain hides two very different halves. Here is how the week unfolded, day by day.

Day by day

• Monday, October 19: closed at $368.06, up 3.8%. This was a rebound after the previous Friday, when the stock fell 2.1% in a broad sell-off in technology shares.
• Tuesday, October 20: closed at $373.71, up 1.5%. Gotrade found no Tesla-specific reason for the move during the session. After the close, Elon Musk said on SpaceX's earnings call that Tesla and SpaceX had each set up special committees of independent directors to look at a possible combination, with no terms agreed.
• Wednesday, October 21: closed at $386.47, up 3.4%, the high point of the week, as investors reacted to the merger news. Tesla's third-quarter results came out after the close.
• Thursday, October 22: closed at $374.58, down 3.1%, on heavy volume of around 51 million shares, well above the 30-day average of about 35 million. The wider market was weak too: the Nasdaq fell 2.6%, Nvidia lost 4.4% and Meta almost 7%.
• Friday, October 23: closed at $372.22, down 0.6%, after trading between $365.27 and $377.32.

Why the earnings did not lift the stock

On paper, the quarter beat expectations. Adjusted earnings per share were $0.48 against a consensus of about $0.45, revenue was roughly $28.05 billion, gross margin improved to 19.6% and free cash flow was a positive $1.53 billion. Cash and short-term investments reached $45.4 billion.

But investors focused on other points from the results and the call. Operating income fell to $718 million, an operating margin of 2.6% compared with 5.8% a year earlier, as operating expenses rose 39%. Tesla cut its 2026 capital spending plan to about $20 billion from more than $25 billion. That helps cash flow, but some read it as a sign that the build-out of AI and robotics is moving more slowly than promised. According to Gotrade, the CFO said operating expenses will keep rising until Optimus, Megapack 3 and the Semi are commercialised.

Where the stock stands now

• Market value: about $1.47 trillion at Friday's close, based on roughly 3.95 billion shares outstanding (our calculation).
• 52-week range: $297.38 to $498.83. Friday's close is about 25% below the high.
• Recent trend: the stock is still below its October 9 close of $382.70, so the week's gain mostly made up for losses earlier in the month.

What it means

The pattern of the week says a lot about what drives Tesla's share price. A possible deal with SpaceX, which has no agreed terms and may never happen, moved the stock more than a quarter of better-than-expected numbers. That is a reminder that Tesla's valuation rests largely on expectations about autonomy, robots and Musk's wider group of companies, rather than on today's car sales.

What to watch next

• Any update from the special committees on a Tesla and SpaceX combination.
• The planned Cybercab launch in Dallas in November.
• Tesla's annual shareholder meeting on December 3.
• October sales figures from Europe and China in early November.

This article is for information only and is not financial advice.