New York, January 26, 2026, 11:22 EST — Regular session
- Tesla shares dropped roughly 2.4% by midday as investors braced for the upcoming quarterly earnings report.
- Wall Street is pressing for updates on Full Self-Driving and the robotaxi strategy amid pressure on car demand and shrinking margins.
- Traders are zeroing in on Tesla’s guidance for 2026 deliveries and the speed of growth in software-driven revenue.
Tesla shares slipped Monday, with investors cautious ahead of the company’s quarterly earnings due later this week. The question on many minds: how much of Tesla’s value hinges on Elon Musk’s autonomous driving ambitions versus actual vehicle sales. By 11:22 a.m. EST, the stock had dropped 2.4% to $438.32.
The situation is tricky. Tesla’s main electric-vehicle business continues to generate revenue, yet the stock increasingly reflects bets on future autonomy and software earnings.
This ramps up the pressure on this week’s earnings and conference call: investors are hunting for proof that demand is holding steady, costs aren’t spiraling, and the self-driving narrative is shifting from demos to scalable progress.
Tesla’s shift coincided with Wall Street’s major indexes climbing broadly, setting the stage for a busy week packed with big tech earnings and a key Federal Reserve policy announcement. 1
Tesla’s market cap, sitting near $1.49 trillion, leans heavily on bets in autonomy and robotics, even as its EV sales face pressure and deliveries dipped in 2025, LSEG data shows. “Investors are largely looking past the near-term fundamentals,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown, noting that maintaining a future-growth story is crucial given the stock’s “still-lofty valuation.” Ken Mahoney, CEO of Mahoney Asset Management, emphasized 2026 as the year to see if “AI becomes revenue + profit, not just spend.” Shay Boloor, chief market strategist at Futurum Equities, pointed to watching for signs Tesla might be sacrificing short-term margins to build a larger fleet it plans to monetize later through software. 2
Musk highlighted progress on the robotaxi project in Austin and said he expects regulatory approval for Full Self-Driving—a driver-assistance system partly offered via subscription—in Europe and China by next month.
Tesla is changing up its monthly subscription bundle in North America, moving certain highway driver-assistance features that used to come with a purchase into the subscription instead.
The immediate figures remain the sticking point. Analysts forecast a 3.6% decline in fourth-quarter sales and a 40% plunge in adjusted profit, according to LSEG data. Automotive gross margin, excluding regulatory credits, is projected around 14.3% — a key profitability metric that removes the frequently unpredictable emissions-credit income from vehicle sales.
Tesla’s new, more affordable “Standard” Model 3 and Model Y versions will catch the eye as buyers tighten their budgets. Investors are also keeping an eye on whether the energy storage segment can sustain growth, even as vehicle sales slow down.
Competition is still fierce. Chinese and European carmakers have aggressively expanded their EV offerings, while widespread price cuts in the sector are squeezing margins, forcing companies to choose between profit and volume.
Yet the bullish case for the stock can unravel quickly. Any delay from regulators on approvals, another slip in the robotaxi schedule, or a sharper-than-anticipated drop in Tesla’s margins and demand could turn the downside risks from hypothetical to real.
Tesla’s quarterly report and management webcast arrive Wednesday, January 28. Investors will zero in on 2026 delivery targets, updates on the Cybercab schedule, and the potential for Full Self-Driving to become a consistent profit driver.
