Tesla Stock Stays Hot With Retail Bulls Even As Daiwa Slashes 2025, 2026 Profit Targets After Q2 Letdown

Retail investors remained bullish on Tesla despite Daiwa Capital Markets cutting its profit estimates for 2025 and 2026, as well as a disappointing second-quarter (Q2) report.

Tesla delivered $0.40 adjusted earnings per share for Q2, compared to an analyst consensus of $0.41 and $0.52 a year prior. 

Revenue was $22.50 billion, representing a 12% year-over-year decline. Automotive sales dropped by 16% reaching $16.66 billion, while energy income decreased by 7% amounting to $2.79 billion. Gross margin slipped to 17.2% from 18% over the same period a year ago. 

Tesla cited lower deliveries, falling average selling prices, and reduced regulatory credits as the primary drivers of the decline, along with higher expenses for AI and R&D.

However, retail sentiment was ‘bullish’ on Stocktwits amid ‘high’ message volume.

CFO Vaibhav Taneja stated that the company’s energy segment could be impacted by President Donald Trump’s proposed energy bill and tariffs. 

Tesla’s shareholder letter described Q2 as a “seminal point” as the company expands into AI and robotics. The first builds of a more affordable EV began in June, with volume production expected in the second half of 2025. 

Production of the Tesla Semi and Cybercab is scheduled for 2026.

Daiwa retained its ‘Neutral’ rating on Tesla after the Q2 report and kept its price target at $300. The firm lowered its earnings estimates for 2025 to $1.55 from $1.90 and for 2026 to $1.90 from $3.00, citing softer EV demand and a decline in regulatory credit revenue.

Daiwa said weaker sales and fewer credits could pressure Tesla’s auto margins and make it harder for the company to invest in AI. It added that progress on robotaxi revenue remains the key driver for the stock.

During the earnings call, CEO Elon Musk said that Tesla would soon expand its robotaxi service area in Austin and is likely to secure regulatory approvals in the Bay Area, Nevada, Arizona, Florida, and other states. He said Tesla was “much better than Google by far” at real-world AI, referring to Waymo. 

Alphabet CEO Sundar Pichai announced that Waymo has recently launched in Atlanta, expanded in Austin, Los Angeles, and the Bay Area, and is testing in over 10 cities, including New York and Philadelphia.

Late Friday, Stifel also lowered its Tesla price target to $440 from $450 and kept a ‘Buy’ rating on the shares. Stifel said it is updating its forecasts to reflect the tariff impact on both the Auto and Energy businesses and believes the “overwhelming key to the Tesla story over the next year” is the success of its unsupervised FSD technology and robotaxi traction.

Additionally, The Information reported Tesla is “well behind” the pace needed to meet Elon Musk’s publicly stated goal of producing at least 5,000 Optimus humanoid robots this year, according to The Fly. The report stated that the number of robots produced so far is in the hundreds, citing two individuals with knowledge of the program.

According to Koyfin, Tesla’s average 12-month price target is $307.19, indicating a downside of 2.81% from the last close. Analyst ratings distribution shows 4 ‘Strong Buy’, 14 ‘Buy’, 19 ‘Hold’, 7 ‘Sell’, and 3 ‘Strong Sell’, with a total of 47 analysts covering the stock.

Tesla’s stock has declined 16.7% so far in 2025.

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