TSLA Stock Trades Flat After Hours Following Drop In Q3 Revenue, Earnings, And Heavy AI Spending

• Capital expenditures in the quarter jumped 110% to $4.7 billion. 
• The near doubling in capital expenditure follows the company’s efforts to pivot into AI and robotics, in addition to car manufacturing.
• Tesla said on Wednesday that capacity build-out continues for superintelligence compute, battery materials and semiconductor manufacturing.

Shares of Tesla (TSLA) stayed flat in after-hours trading on Wednesday after the company reported third-quarter results that were marginally below revenue expectations and ahead of forecasts on adjusted earnings, even as capital expenditures jumped 110% amid its push into artificial intelligence and robotics.

The electric-vehicle maker posted revenue of $28.0 billion, compared to an analyst estimate of $28.3 billion, and adjusted earnings of $0.48 per share, against an expected EPS of $0.45, for the period ended September 30, after recording a 2% drop in vehicle deliveries. In the corresponding quarter of 2025, the company had clocked quarterly revenue of $28.1 billion and earnings per share of $0.50, after clocking its best quarterly deliveries, thanks to consumers rushing to make their EV purchases before the federal tax credit of $7500 on their purchases expired.

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Margins And Spending Remain In Focus

Adjusted net income reached $1.7 billion in the quarter, down 4%. Operating cash flow was $6.3 billion and free cash flow was $1.5 billion, after capital expenditures rose 110% to $4.7 billion. Cash, cash equivalents, and short-term investments ended the quarter at $45.4 billion, up 9% year-over-year.

The near doubling in capital expenditure follows the company’s efforts to pivot into AI and robotics, in addition to car manufacturing. The company launched its dedicated robotaxi offering, called the Cybercab, with no steering wheel or pedals, into its robotaxi fleet in Austin during the quarter. The company is also attempting to build its own chips with rocket maker SpaceX under a joint project called Terafab and recently launched the new iteration of its original Roadster sports car, complete with SpaceX thrusters to allow the vehicle to fly.

In addition, the company began production for its humanoid robot called Optimus at its factory in Fremont and also for its fleet-focused offering, the Tesla Semi, in Nevada. Tesla management previously guided to more than $25 billion in capital expenditures for full-year 2026, compared to $8.53 billion in 2025, with spending expected to keep rising over the following two to three years. Elon Musk described 2026 as “a massive capex year” but expressed confidence that the investments would deliver “the best capex returns that we’ve ever seen.”

Tesla said on Wednesday that capacity build-out continues for superintelligence compute, battery materials and semiconductor manufacturing, while also noting that it expects profits from the software, AI and fleet segments to accompany its hardware-related profits over time.

SPCX-TSLA Merger Backdrop

Special committees at Tesla and SpaceX continue to review a possible merger between the two Elon Musk-owned companies. Musk said on Tuesday during SpaceX’s Q3 earnings call that the idea has “a lot of merit” but cautioned that a deal is not certain and would require broad shareholder support.

Altimeter Capital’s Brad Gerstner suggested on Wednesday that a control premium could place Tesla shares in a $420–$550 range in case of a deal.  

How Did TSLA Retail Traders React?

On Stocktwits, retail sentiment around TSLA stock stayed within the bullish territory over the past 24 hours, while message volume stayed at high levels.

A Stocktwits user opined that the stock is overvalued at its market valuation of nearly $1.5 trillion.

Another highlighted that the company’s revenue and earnings slipped in the quarter, and yet expenditure doubled.

TSLA stock has dropped 14% year-to-date.  

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