Tesla Stock Earnings: WATCH THIS ASAP....
Overall Thesis
Tesla's Q1 2026 earnings beat across every major metric (EPS, revenue, GAAP net income, FCF). Optimus factory construction has officially started at Giga Texas, cyber cab production has begun, FSD subscriptions grew 51% QoQ. The $25B CAPEX raise (up from $20B) will push FCF negative for a few quarters but positions Tesla as the dominant physical-AI company; $45B in cash supports the investment cycle. Price target $900+ by end of 2026 from pre-earnings $384.
Narratives
Tesla's Q1 2026 earnings beat every estimate — EPS 41¢ vs 33¢, revenue $22.4B vs $21.4B, GAAP net income $1.45B vs $1.17B, FCF $1.44B. Optimus factory construction has officially started at Giga Texas (10M-robot/year capacity), Fremont conversion from Model S/X lines starts late July/August, and cyber cab production has begun. FSD subs grew 51% QoQ to 1.28M adding $17.8M/month. The $25B CAPEX raise is a positive signal — Tesla is spending on actual production lines, not just chips — and $45B cash amply supports going FCF-negative through the investment cycle.
Key Arguments
- Q1 earnings beat all estimates: EPS 41¢ vs 33¢, revenue $22.4B vs $21.4B, net income $1.45B vs $1.17B, FCF $1.44B
- Optimus factory construction has officially started at Giga Texas; Fremont Model S/X lines convert to Optimus late July/August with 1M-robot/year initial capacity, scaling to 10M/year
- Cyber cab production has started at Giga Texas
- FSD subscriptions +51% QoQ to 1.28M, adding $17.8M/month; Cortex 2 training compute online; Dojo 3 custom silicon in development
- CAPEX raised to $25B (from $20B) is positive — Tesla is the dominant physical-AI company with no clear #2, investing in production lines not just chips
- $45B cash cushion amply supports the investment cycle
Predictions (1)
Hedges & Caveats
- FCF will go negative for several quarters due to raised CAPEX
- Markets are overextended and a broader pullback could drag Tesla alongside