Tesla shares fell below $300 on Wednesday for the first time since August 2025, touching $299.70 before recovering, as the decline that began with second-quarter results entered a fifth session.
The stock opened at $307.32, reached $309.05, then sold off to a low that sat just $1.88 above its 52-week floor of $297.82.
Shares traded at $302.00 shortly before 1:00 p.m. ET — marking a 19.3% drop from the $374.01 close of July 22, the afternoon before the results landed.
Market capitalisation stands at about $1.19 trillion, against $1.53 trillion earlier this month.
At the session low, the stock was down 39.9% from the all-time high of $498.83 set late last year, as shareholders prepared to enter an instrumental year for Tesla‘s robotics and autonomous ambitions.
The move came on a broadly weak session.
The Dow Jones Industrial Average was down 1.6%, the Nasdaq Composite 0.9% and the S&P 500 0.8%, with Nvidia off 2.6%, ahead of a Federal Reserve policy decision due after the close.
The Slide Has Outlasted the Earnings
The first leg came on Thursday, July 23, when the stock closed down 14.5% at $319.69, its lowest close since early August 2025.
Shares opened about 8.0% lower at $341.00 that morning before losing more ground through the session, closing the week at $313.03 on Friday.
No recovery followed. The stock closed at $309.22 on Monday and $307.44 on Tuesday before breaking the $300 line on Wednesday.
The Target Cuts Have Kept Coming
Seven firms cut their price targets on the day of the crash — Truist, Morgan Stanley, Canaccord, JPMorgan, TD Cowen, Cantor Fitzgerald and Mizuho — while Bank of America, Oppenheimer and Needham left their valuations unchanged.
UBS moved the same day, cutting to $385 from $442 on a neutral rating. Piper Sandler followed on Friday, going to $450 from $500.
The revisions have continued into this week. Deutsche Bank cut on Monday while retaining a buy rating, with Edison Yu writing that the robotaxi service and Optimus are “scaling slower than anticipated” and that investor enthusiasm for physical artificial intelligence has cooled since the spring.
Yu also flagged a stretch in which the company may not deliver a significant milestone until late in the year even as cash burn increases materially.
RBC Capital lowered its target to $480 from $500 on Tuesday.
Truist analyst William Stein made the largest dollar reduction of the wave, taking his target down $60 to $370 on a hold rating, citing higher AI spending and rising capital costs and forecasting negative free cash flow through the remainder of 2026.
Morgan Stanley produced the most substantive revision, cutting to $400 from $417 on an equal weight rating.
Andrew Percoco reduced 2026 adjusted EBITDA estimates by 7.0% and 2027 by 12.0%, and now models capital expenditure of nearly $30 billion in 2027 against a previous $20 billion, with free cash flow burn of roughly $14 billion next year rather than $5 billion.
Percoco described the spending as unavoidable, calling it “a necessary investment to establish and defend a leadership position in autonomy and robotics.”
The pattern across the notes has been consistent. Targets came down; ratings largely did not. Consensus now sits near $403, with roughly half the covering analysts outright bullish.
What the Quarter Showed
Tesla reported after the close on Wednesday, July 22.
Revenue rose 26.0% to $28.24 billion, beating the $25.71 billion expected by analysts polled by LSEG, on record second-quarter deliveries of 480,126 vehicles.
Adjusted earnings came in at 33 cents a share against 51 cents forecast, a miss of close to 38%.
Operating income fell 56.9% to $398 million and operating margin compressed to 1.4% from 4.1% a year earlier, while operating expenses jumped 47.0% to $4.35 billion. Automotive gross margin excluding regulatory credits fell to 16% from 19%, and regulatory credit revenue dropped 67.0% to $146 million.
Free cash flow turned negative for the first time in more than two years, at minus $1.09 billion, as capital expenditure jumped 142.0% to $5.79 billion.
Chief financial officer Vaibhav Taneja confirmed full-year capex above $25 billion against $8.5 billion in 2025.
Operating cash flow rose 84.9% to $4.70 billion and cash reached $43.52 billion. No numerical guidance was issued for the third quarter.
Autonomy and Robotics Under Scrutiny
Both programmes carrying the valuation drew caution rather than acceleration.
Cybercab production has begun at Giga Texas, with more than 380,000 unsupervised miles logged across seven cities. Mizuho’s Vijay Rakesh put the deployed fleet at roughly 25 to 50 vehicles against 2,000 to 3,000 for Waymo.
Management said the Optimus production line at Fremont would begin operating by the end of 2026, while cautioning that highly innovative components and the absence of an existing supply chain complicate the ramp. JPMorgan described the supply chain build as progressing smoothly.
On robotics generally, Musk told investors that no company has yet built a humanoid capable of general-purpose autonomous work, describing most industry demonstration videos as scripted or remote-controlled.
Full self-driving subscriptions reached 1.48 million, up 56.0% year on year, with attach rates on North American deliveries above 55%.
Not Everyone Is Selling
Cathie Wood’s ARK Investment Management has been buying through the decline, adding 28,000 Tesla shares on Monday after a $52 million purchase the previous week and a $23 million allocation across Tesla and SpaceX.
RBC separately published a note examining what a Tesla and SpaceX combination might look like, and argued that Tesla’s Terafab project could avoid $1.5 trillion in external chip spending by 2050 — the clearest articulation of the case for the capital expenditure the market has been punishing.
Working the other way, Tesla’s own presentation of robotaxi progress uses a cumulative chart that obscures a slowdown a quarterly view would reveal. Among those positioned for the fall, Michael Burry’s short has moved sharply into profit.
The Slide Runs Through SpaceX Too
SpaceX has fallen roughly 48% from its June 16 peak above $225, when it carried a market capitalisation of $2.64 trillion weeks after its record trading debut.
The stock set an all-time low of $107.01 on Tuesday before recovering, and traded at $116.85 on Wednesday, up 0.4%.
Musk holds 4.8 billion SpaceX shares and 350 million options, alongside roughly 700 million Tesla shares.
Forbes valued his fortune at $708.1 billion on Wednesday, down $21.7 billion or 3.0% on the day, having briefly fallen below $700 billion earlier in the week. His paper wealth peaked at $1.45 trillion on June 16, the day SpaceX shares topped out.
Around $116 billion of the decline is not market-driven, reflecting Forbes removing restricted Tesla options after the company replaced Musk’s 2018 performance award with terms requiring him to remain in a senior role through January 2028.
He remains the world’s wealthiest person by a wide margin, ahead of Larry Page at $275.5 billion and Sergey Brin at $254.1 billion.
