Tesla stock slides after Q3 beat: what Wall Street analysts are saying

Tesla's third-quarter report beat Wall Street's profit estimate on Wednesday, yet by Thursday morning the stock was heading the other way. In premarket trading, Tesla shares were down about 5%, at roughly $367, after closing Wednesday's regular session at $386.47. At the same time, several big banks published their first verdicts on the quarter, and a few of them actually raised their price targets. Here is how those two things fit together.

We covered the results and the earnings call in separate articles. This one looks at the market and analyst reaction the morning after.

Why the stock is falling

On paper, the quarter was decent. Adjusted earnings per share came in at $0.48, ahead of estimates of around $0.43 to $0.45. Revenue of $28.05 billion was slightly above the consensus forecast, gross margins improved and free cash flow was positive at about $1.5 billion, when many had braced for cash to flow out.

The problem is what investors are paying for. Tesla trades at a valuation of more than $1.5 trillion largely because of its bets on autonomy and robots, not because of car sales. Against that backdrop, three points from the call landed badly:

• Lower spending: Tesla cut its 2026 capital expenditure plan to about $20 billion, from more than $25 billion. For most companies that would be good news for cash flow. For Tesla, several market watchers read it as a sign that the build-out of Cybercab, Optimus and the Terafab chip project is moving more slowly. Gene Munster of Deepwater Asset Management said investors use capex as the clearest hard number for how fast that work is going.
• Later robots: Optimus deliveries to outside customers are now pencilled in for around the end of 2027, and Elon Musk said reaching full production speed will take at least a year.
• No merger news: after Musk's comments earlier in the week about a possible Tesla-SpaceX combination, the call offered nothing new on that front.

Underneath the beat, the core numbers were also softer: net income attributable to shareholders fell 29% from a year earlier to $787 million, and automotive revenue slipped 3%. The broader market did not help either, with US stock futures pointing lower on Thursday.

What the analysts say

The first analyst notes show a split that has defined Tesla coverage for years.

• Piper Sandler (Alexander Potter) kept its buy rating and raised its target to $475 from $450. Potter pointed out that automotive revenue of about $20.6 billion came in above the consensus range, and that most parts of the profit and loss account are moving in the right direction, helped by higher FSD take-up.
• UBS stayed at Neutral but raised its target to $425 from $391, and increased its earnings estimates for 2027 and 2028. The bank highlighted that about 75% of North American deliveries in the quarter came with FSD, and that 2027 Megapack capacity is close to sold out thanks to demand from data centers. It does not expect Robotaxi to matter financially before late 2027 or 2028.
• Goldman Sachs (Mark Delaney) kept a Neutral rating and a $360 target, below the current share price. It welcomed the FSD numbers and noted 3.1 million cumulative unsupervised robotaxi miles as of October 18, but flagged operating expenses of $4.78 billion, up 39% year over year, and energy revenue that fell short of its forecast. Goldman sees the valuation as full.
• TD Cowen reiterated its buy rating with a $460 target.

Across the roughly 28 analysts tracked by TipRanks over the past three months, the picture is evenly balanced: about 14 buys, 11 to 12 holds and two sells, with an average price target of around $405 to $410. That is only modestly above Wednesday's close.

Why it matters

The reaction shows how far Tesla's share price has moved away from its day-to-day car business. A profit beat and improving margins were not enough, because the debate is about timing: how quickly Robotaxi, unsupervised FSD in customer cars and Optimus will start generating real money. Every sign of delay, or of slower investment, weighs more heavily than a few cents of earnings.

At the same time, the target increases from Piper Sandler and UBS show that some analysts see the more ordinary parts of the business, FSD subscriptions and energy storage, quietly getting stronger.

What to watch next

• How the stock trades once the regular US session opens at 9:30 a.m. Eastern (2:30 p.m. UK time); premarket moves can change quickly.
• Further notes from banks such as Morgan Stanley and Jefferies in the coming days.
• The Cybercab launch in Dallas, planned for November, as the next concrete test of Tesla's autonomy timeline.
• Tesla's annual shareholder meeting on December 3.

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