Jasper has worked out that the Tesla makes almost no sound when it pulls out of the driveway.
This is a problem, because he now expects to come with me every time I go to the car.
I've owned the car for a while now… and it's the best car I've ever had — and I say that as someone who's driven through enough countries to know what a bad motorway feels like.
Last year we did a 2,000 mile road trip on less than $20 of charging cost. Try doing that in a diesel.
I also own the stock at a cost basis of $192/share.
So when Tesla reported earnings this week, I was paying attention on two fronts…
The headline numbers were fine.
Revenue of $22.39 billion, up 16% year-over-year.
Earnings per share beat analyst estimates. Free cash flow came in at $1.44 billion against expectations of a roughly $1.43 billion burn.
Gross margin hit 21.1%, the highest in several quarters.
Yet the stock dropped 2.4% after earnings.
Which tells you the numbers weren't really the story.
The story was what CFO Vaibhav Taneja said on the call…
CAPEX is now guided at over $25 billion for 2026.
That's up from $20 billion guidance in January... and nearly triple the $9 billion they actually spent in 2025. He also told us to expect negative free cash flow for the rest of the year… and possibly several years.
So the market sold off, because this year’s market hates CAPEX more than it loves good quarterly numbers. Just look at what happened to Microsoft and Amazon last quarter…
Recommended links
Marc Lichtenfeld - Author of the best-selling book Get Rich With Dividends – is giving away his Ultimate Dividend Package...
Free of charge!
Click Here to Get His #1 Dividend Stock... The Safest 9% Dividend in the World... Top Three "Extreme Dividend" Stocks, And Much, Much More
But it’s clear that the bull case is real…
First you’ve got robotaxi launching in Dallas and Houston with zero accidents reported.
On a personal front, FSD just got regulatory approval in the Netherlands with an EU rollout planned for Q2. Hopefully it comes to the UK this decade…
Plus the energy division quietly did $2.4 billion in revenue this quarter and services revenue grew 42% year-over-year.
So there's a genuine business emerging beyond car sales.
The bear case is also real…
Deliveries only grew 6.3% year-over-year.
And the stock still trades at roughly 204x forward earnings, which leaves basically zero room for error.
What I keep coming back to is the car itself.
When a product is that good… and the Andorra trip genuinely changed how I think about the cost of driving… the underlying business tends to find a way.
But tends to isn't a thesis, and 204x earnings is a valuation that requires everything to go right, for several years running.
So while the tension doesn't resolve from one quarter's numbers, it’s good to see that the business is still on stable footing… we just need the robotaxi monetization to kick in sooner rather than later.
Oliver