Tesla Stock Slides 18% as RSI Falls Below 30
Tesla stock extended its post-earnings decline on July 28, closing near $307 after investors continued to digest weaker profit, falling automotive margins and a sharp increase in spending. The shares have lost about 18% from their $374.01 close before Tesla released its second-quarter results on July 22.
The latest decline has also pushed Tesla’s 14-day Relative Strength Index below 30. Barchart’s technical data placed the reading near 27, a level commonly associated with oversold conditions. TSLA is now down roughly 31% in 2026, even as Tesla reports record vehicle deliveries and expands its Robotaxi, Full Self-Driving and Optimus programs.
The chart suggests selling pressure may be stretched. Tesla’s financial results explain why investors have remained cautious.
Tesla Stock Extends Its Post-Earnings Selloff
Tesla shares closed at $374.01 on July 22 before the earnings release. The stock then suffered a double-digit decline in the following session and continued falling toward $307 by July 28.
The extended move matters because this is no longer a one-day reaction to an earnings headline. Investors have had several sessions to assess the numbers, and the market has continued lowering the price it is willing to pay for Tesla’s long-term AI and robotics ambitions.
That repricing has brought TSLA close to its lowest level in almost a year.
Weak Profits Overwhelm Record Deliveries
Tesla’s second-quarter revenue increased 26% from a year earlier to $28.24 billion, exceeding the $25.71 billion average analyst estimate. Vehicle deliveries reached a quarterly record of 480,126, up from 384,122 in the same period last year.
Those gains did not translate into the profit Wall Street expected. Adjusted earnings reached $0.33 per share, below the $0.51 analyst consensus reported by LSEG. Automotive gross margin came in at 16.3%, compared with the 18.04% expected by analysts.
Lower vehicle prices contributed to the pressure. Average revenue per vehicle fell to $42,730 from $45,345 a year earlier. Regulatory credit revenue also dropped by about two-thirds to $146 million, removing a historically high-margin source of income.
The result left Tesla selling more vehicles while earning less from each unit. That weakens the cash engine supporting the company’s expansion into AI infrastructure, autonomous vehicles and humanoid robots.
Tesla Is Spending Faster Than Its Car Business Can Fund
Tesla recorded $5.8 billion in capital expenditure during the quarter, more than twice the level reported a year earlier. Free cash flow fell to negative $1.1 billion, marking the company’s first quarterly cash burn in more than two years.
Management expects full-year capital spending to exceed $25 billion in 2026 and rise further over the next two to three years. The money will support Robotaxi deployment, Optimus production, AI computing infrastructure, semiconductor development, batteries and manufacturing capacity.
Elon Musk described 2026 as a massive investment year and said the projects should eventually generate substantial returns. Investors are now focusing on the time required for those returns to arrive.
Tesla finished the quarter with about 1.5 million active Full Self-Driving subscriptions, representing 56% annual growth. Its energy storage deployments also increased to 13.5 GWh. These businesses provide evidence of demand beyond vehicle sales, although neither has yet removed the pressure created by rising capital requirements and weaker automotive profitability.
Memeburn’s earlier analysis of Tesla and Alphabet’s rising AI costs showed how investors are paying closer attention to cash flow as technology spending accelerates. Tesla’s continued decline shows that concern has persisted beyond the first post-earnings session.
What an RSI Below 30 Actually Signals
RSI measures the speed and magnitude of recent price moves on a scale from zero to 100. A reading below 30 is widely treated as oversold, meaning selling momentum has become unusually strong relative to the stock’s recent trading history.
That can create conditions for a short-term rebound as sellers become exhausted and traders enter positions near support. The indicator does not measure intrinsic value, future earnings or the amount of cash Tesla will need to finance its strategy.
A stock can remain oversold when analysts continue cutting earnings estimates or when new information weakens the underlying investment case. Tesla’s RSI therefore shows that the selloff has become stretched. Evidence of a durable bottom would still need to come from price stabilization and stronger business performance.
For Tesla, the most important confirmation points are automotive margin, free cash flow and the commercialization rate of its autonomy products. Progress in the Tesla 2026 Summer Update may improve the software experience, but investors need to see that software adoption generates enough high-margin revenue to support the spending cycle.
Cathie Wood Buys Into the Decline
ARK Invest has treated the selloff as a buying opportunity. Cathie Wood’s funds purchased approximately 28,000 Tesla shares on July 27, a position worth about $9 million at the time, according to Barron’s.
Tesla already represented more than 9% of ARK Innovation ETF assets, making it the fund’s largest holding. The new purchase reinforces ARK’s long-term conviction in autonomous driving, Robotaxi networks and robotics.
The purchase reflects ARK’s portfolio conviction, although its size remains small compared with Tesla’s daily trading volume.
The $300 Level Becomes the Next Test
Tesla is now trading only a few percentage points above $300, turning that round-number area into the next immediate test for buyers. Holding near this level while RSI recovers could support a technical rebound after the rapid post-earnings decline.
A sustained move below $300 would indicate that investors are still reducing exposure despite the oversold reading. The stock would then need a new catalyst, such as faster Robotaxi expansion, stronger FSD monetization or evidence that automotive margins are stabilizing, to change the direction of the market.
Tesla’s current setup contains two different signals. The chart shows a stock sold hard enough to attract tactical buyers, while the financial results show a company entering a more expensive phase of its AI transition.
The balance between those signals will determine whether the move toward $300 becomes a short-term exhaustion point or another stage in Tesla’s 2026 decline.
FAQs
Why is Tesla stock down in 2026?
Tesla stock is down in 2026 because investors are reacting to weaker profit, lower automotive margins and rising capital spending. Even though Tesla reported record deliveries, the market is focusing more on cash burn and whether the company can fund its AI, Robotaxi and Optimus expansion without further margin pressure.
What does it mean when Tesla’s RSI falls below 30?
An RSI below 30 usually means Tesla stock is technically oversold. This can attract short-term dip buyers, but it does not guarantee a bottom. Investors still need to watch whether Tesla’s margins, free cash flow and share price action improve after the selloff.
Is Tesla stock a buy after falling 18%?
Tesla stock may look attractive to tactical traders because the RSI is oversold and the price is near the $300 level. However, long-term investors may want stronger evidence that automotive margins are stabilizing and that Tesla’s AI and autonomy spending can turn into high-margin revenue.
Why did ARK Invest buy Tesla shares during the selloff?
ARK Invest bought Tesla shares because Cathie Wood’s funds remain bullish on Tesla’s long-term opportunities in autonomous driving, Robotaxi networks and robotics. The purchase signals conviction, although it does not remove the near-term concerns around Tesla’s cash flow and margins.
What should investors watch next for Tesla stock?
Investors should watch the $300 price level, automotive gross margin, free cash flow and updates on Robotaxi, Full Self-Driving and Optimus. A technical rebound becomes more credible if Tesla can stabilize near support while showing better evidence that its spending cycle is producing future revenue.