Tesla Q2 EPS: A Mixed Bag with Bright Spots in Energy & Robotaxi

Tesla Q2: EPS Misses, Gross Margins BeatZacks Rank #5 (Strong Sell) stock Tesla (TSLA) delivered second-quarter earnings results Wednesday night that fell short of top-and-bottom line expectations slightly:·       Q2 revenue $22.50B, vs. Wall Street Est of $22.64B·       Q2 ADJ EPS $0.40C, vs. Wall Street Est of $0.42C·       Gross margins 17.2%, vs. Wall Street Est of 16.5%Despite the earnings miss, Tesla shares were buoyed early by the fact that the bleeding in gross margins has seemingly come to a halt, with gross margins coming in at 17.2% versus Wall Street estimates of 16.5%. The gross margin beat is especially impressive when investors consider that Tesla has been offering generous incentives and lower prices to its consumers. Coming into the report, Wall Street expectations were dire amid a slowing core EV business and CEO Elon Musk’s reputational damage on both sides of the political aisle. Nevertheless, Tesla has limped over a low bar that was a dramatic earnings miss and delivered earnings that were better than most feared. Additionally, news broke right before the market closed that Tesla is in ‘early talks’ with the state of Nevada to expand its robotaxi service. If Tesla can convince investors that it will rapidly scale its robotaxi service, shareholders will be more forgiving regarding the core EV business, as Musk and his team look to expand into new verticals, transition, and diversify the business.Tesla Earnings Positives1.       Digital Asset Gain: Tesla reported a $284 million gain on digital assets. Although the company unloaded some of its Bitcoin holdings over the past few years, it still holds 11,509 Bitcoin, worth over $1 billion.2.       Tesla’s Energy Business is Electric: Tesla’s energy division includes its solar and energy storage products (Powerwall & Megapack). While Tesla’s slowing auto business has received negative attention, its energy business has been a sleeper and is on fire, helping to pick up the slack. As utilities increasingly rely on distributed energy sources amid surge in energy consumption driven by AI data centers, the growth is unlikely to slow down anytime soon. The Tesla energy segment saw record gross profit of $2.6 billion in 2024. For context, Tesla Energy gross profit reached a record $846 million in Q2 2025 alone.Tesla Earnings Negatives1.       Free Cash Flow Falls Short: Tesla free cash flow of $146M missed Wall Street estimates of $760 million. However, the company has been investing in retooling some of its factories and transitioning some of its businesses. Investors will be watching to see how the investments pay off in the second half of 2025.Bottom LineMy view, based on the numbers, is that Tesla outperformed basement-level expectations in Q2. The company will need to show evidence that its core EV business will stabilize, that it will scale its robotaxi business, and that its thriving energy business will continue to grow.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tesla, Inc. (TSLA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks