Tesla Inc (NASDAQ:TSLA) will hand down its second quarter earnings after the bell Wednesday amid a dramatically different backdrop than just three months ago, according to Wedbush analysts.
“While near-term and this quarter the numbers are nothing to write home about, we believe investors are instead focused on the AI future at Tesla with a motivated [CEO Elon] Musk back driving Tesla's future,” the firm wrote.
The Wedbush analysts believe Tesla investors are now seeing more of a “wartime CEO” as Musk is focused on the company’s Robotaxi expansion in Austin.
Investors will also be listening closely for any new commentary around Tesla’s relationship with Musk’s AI startup, xAI, which could require a shareholder vote later this year, the firm added.
For the second quarter, Wall Street expects Tesla to report total revenue of $22 billion, with $16 billion from automotive sales.
Earnings per share are expected to come in at $0.39, and gross margins excluding regulatory credits are projected to be about 13% to 14%.
While demand has been a challenge in recent quarters, particularly in China, there are early signs of stabilization, Wedbush believes.
“Tesla saw a rebound in June with sales increasing for the first time in eight months, reflecting higher demand for its updated Model Y,” analysts wrote.
According to Wedbush, deliveries in the region are “starting to slowly turn a corner with China representing the heart and lungs of the Tesla growth story.”
However, upcoming policy changes in the US may present new challenges, the analysts warned.
“Clearly losing the EV tax credits with the recent Beltway Bill will be a headwind to Tesla and competitors in the EV landscape looking ahead and this cash cow will become less of the story (and free cash flow) in 2026,” Wedbush noted, adding that they “expect some directional guidance on this topic during the conference call.”
Wedbush repeated its ‘Outperform’ rating and $500 price target on Tesla.
“Musk is laser focused as CEO, Robotaxi/autonomous expansion has begun, demand stabilization has begun, especially in China, and Tesla is about to embark on an aggressive AI-focused strategy that we believe will include owning a significant piece of xAI,” the analysts concluded.