Tesla’s earnings report, released on January 28, 2026, marked a strategic turning point for the company. The electric vehicle (EV) maker decided to shift its focus to artificial intelligence (AI) technologies.
Let’s dive into Tesla’s report for the fourth quarter (Q4) of 2025. Adjusted earnings per share (EPS) came in at $0.50, higher than the forecasted $0.45. The firm’s revenue also exceeded expectations, hitting $24.9 billion, but fell 3% compared to Q4 of 2024. A gross margin rose to a two-year high of 20.1%, reassuring investors concerned about persistent price cuts in the auto segment.
Moving on to Tesla’s new strategic direction, a few key points emerge:
Goodbye flagships. Elon Musk announced that the company will stop selling its legendary Model S sedans and Model X SUVs. The factory space in Fremont will be repurposed for manufacturing humanoid Optimus robots.
Record AI investments. In 2026, Tesla plans to spend over $20 billion on AI infrastructure and new production facilities. Last year, this figure was significantly lower, around $8.5 billion.
Deepening ties with xAI. The company aims to pump $2 billion into Musk's startup to speed up the development of autonomous systems.
Reliable energy storage. Revenue from Tesla’s Megapack energy storage grew by 25%, solidifying its role as one of the key profit drivers.
Given all these factors, the following outlook for 2026 may be outlined:
Advancement in robotics. Serial production of the Optimus robot is expected to begin by the end of the year, with the anticipated unveiling of a Gen 3 model in Q1.
Cybercab era. Musk has confirmed his plans to start mass manufacturing of a self-driving robotaxi in 2026.
As for the associated risks and headwinds, keep in mind that Tesla’s position is now quite shaky. The company is not a pure growth story in the auto industry anymore, with annual vehicle sales declining by 9%. Its current pivot into AI and robotics is rather tricky, as these markets are nascent and speculative.
Tesla is willingly losing its EV market share, with BYD from China taking the lead, in order to break into the new industry. Investors are cautiously optimistic about the report, keeping the stock price up.
The overall recommendation is to buy Tesla shares. To provide a better reward-to-risk ratio, enter the deal when quotes return to $375. Lock in profits at $500. Set Stop Loss at $350.
The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
