A lot’s at stake for Tesla this week.
The EV giant is slated to drop its Q3 results on Wednesday, Oct. 22, with the call likely to reset expectations for both its car business and the bigger-than-cars story investors are betting on.
Many would argue, though, that the larger recent story hasn’t been the quarter. It’s Elon Musk’s $1 trillion pay plan and a potential xAI tie-up that could pull Tesla a lot deeper into the AI arms race. Investors seem to be circling the same questions:
- $1 trillion package, key date: A shareholder vote is slated for November 6, with Musk’s package framed around multi-year AI/AV execution and valuation hurdles; it also follows Musk’s recent $1 billion open-market Tesla stock purchase.
- Milestone focus: Targets have been set for the Robotaxi rollout and Optimus ramp, effectively keeping compensation linked to concrete AI deliverables, not just vehicle sales.
- xAI tie-up options: Wall Street is monitoring Tesla’s equity stake in xAI or a full merger signal, with nearer-term possibilities including IP/licensing, shared compute, and stronger data integration.
If that all feels like a lot more than a single quarter at this point, there’s one voice worth listening to as the volume rises.
Dan Levy is a veteran autos analyst at Barclays who has frequently covered Tesla and the global autos space.
It’s why his sharp take heading into the Q3 earnings print is as pertinent as ever.
Tesla’s split story gets sharper before earnings
Tesla’s latest stock market rally has Wall Street divided again, and Barclays analyst Dan Levy is spelling out why.
Heading into Oct. 22’s pivotal Q3 earnings, Levy says investors are faced with “two contrasting stories.”
On one side, there’s the incredibly potent AI and autonomous-driving narrative that’s been reinvigorated by Elon Musk’s proposed $1 trillion compensation package.
On the other hand, there’s Tesla’s slowing fundamentals, with Q3 deliveries likely the peak for now after buyers rushed in to beat the Sept. 30 expiration of the $7,500 EV tax credit.
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It’s important to note that Tesla stock has surged over 30% since early September, jumping back into trillion-dollar territory. However, Levy argues that the latest bump has been led more by AI optimism than by near-term business strength.
“Fundamentals don’t matter… until they matter,” he warned, stating Tesla’s automotive profits fund its “very cash-intensive” robotaxi and AI ambitions.
Levy keeps an Equal-Weight (Neutral) rating, even as he lifts his price target to $350, which is nearly 20% below where the stock currently trades.
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Additionally, Wedbush’s Dan Ives, perhaps Tesla’s most closely followed analyst, has a similar take heading into earnings week.
In a post on X, Ives said Robotaxi expansion, Cybercab production, and Musk’s xAI investment remain the “major focuses” on the call.
He feels Musk’s new pay package will effectively sail through shareholder approval, hailing it as a “key green light” for Tesla’s next AI chapter. Ives also talked about the potential for deeper integration between Tesla and xAI, pointing to a likely merger or equity stake.
Quick takeaways:
- Two stories, one stock: Barclays’ Dan Levy feels Tesla’s Q3 is contingent on AI hype versus fading fundamentals.
- Big bets ahead: Musk’s $1 trillion pay plan and xAI tie-up currently dominate the analyst chatter before earnings.
- Momentum check: Shares are up 30% since September, but both Levy and Ives warn the rally’s mostly built on faith, not cash flow.
Q3 earnings on deck: the numbers to beat
Tesla will report its Q3 earnings on Wednesday, October 22, after the bell, with the webcast starting at 5:30 p.m. EST.
Here’s what investors will be looking to assess: Does the quarter show that Tesla’s record delivery streak is built around lasting demand, or short-term pull-forward?
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Wall Street expects EPS between $0.52 and $0.55 on $26.27 to $26.45 billion in sales, a sizeable 24% to 27% drop in profit year over year, but 4% to 5% sales growth with volume offsetting weaker pricing.
Fueling that setup is a record 497,099 deliveries, racing ahead of the 440,000 consensus. The beat mostly came as U.S. buyers looked to lock in the $7,500 EV tax credit before it expired September 30.
Nevertheless, the production–delivery gap shows whether inventory piled up late in the quarter. Regional mix also matters, as U.S. strength likely masked pricing pressure in Europe amid intense competition in China.
Tesla didn’t issue detailed quarterly guidance, but in Q2, management reaffirmed its focus on capex-efficient expansion, liquidity strength, and a shift toward AI and software-led profits.
