Key Highlights

  • Tesla shares closed down 3.08% at $374.58 on Oct. 22, despite beating on EPS.
  • Adjusted EPS was $0.48 versus roughly $0.45 expected, with $1.5 billion in free cash flow.
  • Operating income fell 56% on surging AI spending, and the 2026 capex forecast was lowered.
  • Investors are also weighing a possible SpaceX merger, which Tesla declined to discuss on its call.

Tesla (NASDAQ:TSLA) fell on Thursday, 22 October 2026, closing down 3.08% at $374.58 despite a third-quarter beat on both earnings and cash flow. Adjusted earnings per share came in at $0.48 against roughly $0.45 expected, with positive free cash flow of $1.5 billion.

A Beat Overshadowed by Spending and Timelines

The beat was overshadowed by a lower 2026 capital-expenditure forecast of about $20 billion, down from more than $25 billion previously, and a 56% drop in operating income tied to surging AI spending. Chief executive Elon Musk also tempered timelines for the Optimus robot and robotaxi programmes, adding to investor caution about the pace of returns from those initiatives.

A Possible SpaceX Merger in the Background

Investors are also weighing a possible merger with SpaceX, a topic Tesla declined to discuss on its earnings call. Reuters reported separately that any such deal could face delays, leaving the question unresolved for now and adding another layer of uncertainty to how investors are valuing the stock.

A Split Analyst Reaction

Analysts were divided in their response. CLSA and BNP Paribas upgraded the stock, citing sentiment around the potential merger, and Piper Sandler, JPMorgan, Mizuho and UBS raised their price targets. Goldman Sachs and Needham, by contrast, stayed cautious, reflecting continued disagreement over how to weigh the spending increases against the quarter's financial beat.

Part of a Broader Risk-Off Session

Shares closed lower, falling more than the modest move in the XLY consumer-discretionary ETF, within a broader AI-driven technology selloff in which the Nasdaq fell 2.6% and oil spiked above $112 amid Iran-related tensions. Tesla's stock was slightly lower again in after-hours trading.