Key Highlights

● Tesla closed at $374.58 on October 22 despite an adjusted earnings beat.

● Adjusted earnings were $0.48 a share against estimates of $0.43 to $0.45.

● Tesla cut its 2026 capital spending plan to about $20 billion.

● Revenue of $28.05 billion was flat from a year earlier.

Tesla (NASDAQ:TSLA) slipped on Thursday, October 22, 2026, closing at $374.58 despite beating earnings forecasts and lowering its 2026 capital spending plan. The electric-vehicle maker's shares had been sharply lower before the bell, trading at about $365.77 premarket, and briefly recovered to about $387.67 in the morning before fading. The stock was a drag on the S&P 500 and the Nasdaq-100.

A beat, with caveats

Tesla reported after the close on Wednesday. Adjusted earnings came in at $0.48 a share, ahead of estimates of $0.43 to $0.45. Revenue was $28.05 billion, flat from a year earlier. Estimates for revenue varied by source, from $27.78 billion to $28.13 billion.

Profits were much weaker than a year ago. Net income fell sharply to $787 million, and operating income dropped to $718 million. Operating expenses rose steeply. Free cash flow fell to $1.5 billion but stayed positive.

Less spending now, more later

Tesla cut its 2026 capital spending plan to about $20 billion from more than $25 billion. But it plans higher spending in 2027 and 2028 for its Optimus humanoid robot, its Cybercab robotaxi and its Terafab project.

Chief Executive Elon Musk said Optimus could ship to outside customers by the end of 2027.

Musk also addressed questions about a possible tie-up with SpaceX (NASDAQ:SPCX). "Both SpaceX and Tesla have formed special committees to discuss this idea," he said on the SpaceX call. He also said, "I think I said everything that should be said yesterday, tap-dancing through a minefield there."

SpaceX, now public and in the Nasdaq-100, fell sharply on Thursday, giving back more than half of Wednesday's post-earnings gain.

Analysts lift targets

Several analysts raised price targets. CLSA upgraded Tesla to Hold from Underperform and lifted its target to $400 from $310. UBS kept Neutral and raised its target to $425 from $391. Piper Sandler kept Overweight with a target of $475, up from $450. Canaccord raised its target to $442, Mizuho to $460, JPMorgan to $430 and Morgan Stanley to $410. Goldman Sachs kept Neutral and a $360 target, and TD Cowen kept Buy with a $460 target.

A rough day for tech

The S&P 500 fell 93.74 points to 7,663.43, its worst day since July. The Nasdaq Composite dropped 694.00 points to 26,008.86, its steepest decline since June 5. AI and chip stocks led the losses after heavy spending plans from Meta Platforms (NASDAQ:META), a supply warning from Lam Research (NASDAQ:LRCX) and comments from Nvidia (NASDAQ:NVDA)'s chief executive on scarce capital.

The consumer discretionary sector fell, according to market data. Meanwhile, about two of every three S&P 500 stocks rose, according to market reports, as investors moved into staples, health care and homebuilders. The 10-year Treasury yield fell back below a closely watched threshold for the first time since September 22, and the VIX rose 2.35 points to 19.03.

Tesla's Margins and the SpaceX Question

Investors will watch for updates on the SpaceX merger idea, now under review by special committees at both companies, and for progress on Optimus, Cybercab and Terafab as spending shifts toward 2027 and 2028.

Tesla's margins will remain in focus after the drop in operating income. Investors will also weigh how the wider AI and chip selloff affects sentiment toward Tesla, which is spending heavily on robotics and autonomy.

The Federal Reserve announces its rate decision on October 28.