Stock Market Today, July 23: Tesla Stock Crashes on Earnings Miss and Rising AI Spending

Tesla (TSLA -14.52%), the global electric-vehicle, battery storage, and autonomous driving platform, closed at $319.69, down 14.52%. Thursday’s drop followed an earnings miss and heavier AI and robotics spending. Investors will continue watching margins with another focus on autonomous-driving guidance next.
Trading volume reached 114.2 million shares, coming in about 131% above its three-month average of 49.4 million shares.
Tesla IPO’d in 2010 and has grown 20,006% since going public.

How the markets moved today

The S&P 500 (^GSPC -1.21%) fell 1.21% to 7,408.30, and the Nasdaq Composite (^IXIC -2.15%) dropped 2.15% to 25,138. Among electric vehicle manufacturing peers, Rivian Automotive (RIVN -4.19%) closed at $16.46, down 4.19%, and Lucid Group (LCID -5.01%) closed at $6.45, down 4.87%, reflecting pressure across EV names.

What this means for investors

Tesla’s revenue soared in Q2, driven by a surge in EV unit volume. Deliveries jumped 25% year over year, and revenue gains came close to matching that. Yet profits dropped, and free cash flow turned negative as operating expenses and capital spending soared.

Analysts lowered their price targets for Tesla following the earnings miss, citing margin pressure and cautious guidance on autonomous driving.

The future direction of Tesla stock will depend on what investors prioritize. Competition in the EV market has put pricing pressure on Tesla, which it is offsetting with volume. But that additional revenue isn’t reaching the bottom line because of the company’s growth investments and expenses.

Those investments may pay off handsomely in the future, but investors may be waiting for proof before giving Tesla the benefit of the doubt.