Tesla stock erases a full year of gains after post-earnings slide
Tesla shares have erased a full year of gains after an extended slide following its Q2 earnings report — yet the stock still trades at roughly 175 times projected 2026 earnings, versus an average of about 24 times for the rest of the Magnificent Seven, reigniting the valuation debate among shareholders.
According to Barron's, Tesla shares have effectively erased a year's worth of gains after deepening losses that followed the July 22 second-quarter earnings report. The decline capped a five-session losing streak this week — an 18% weekly drop, the worst since 2022 — with no sign of a rebound.
The valuation gap is the standout detail. Barron's reported Tesla trades at roughly 175 times projected 2026 earnings, more than seven times the roughly 24-times average multiple of the rest of the Magnificent Seven — Apple, Nvidia and Microsoft among them. Even after giving back a year of gains, the premium remains steep.
The backdrop is the Q2 report itself: adjusted EPS of $0.33, below the $0.50 consensus, even as deliveries hit a record 480,000 vehicles. Lower average selling prices and rising AI-related capital spending squeezed profitability below expectations.
Some on Wall Street still back the long-term robotaxi, FSD and Optimus story — Wedbush's Dan Ives reaffirmed his $600 price target the same day — but the valuation gap suggests volatility will likely continue until that story is proven out in actual results.
Summaries are prepared by the Tesla Briefing editorial team and may not capture every nuance of the original reporting. You are solely responsible for your own investment decisions.