Tesla Stock Suffered Its Worst Week Since 2022, Falling 18% as Investors Balked at Elon Musk's Robotaxi and AI Spending Plans
Investors are questioning whether AI spending can deliver returns as 2026 capital expenditures could reach $1 trillion, analysts and ratings firms said.
- Wall Street expressed displeasure last week as Alphabet and Tesla Motors raised capital expenditure forecasts, contributing to an expected up to $1 trillion in total 2026 industry spending.
- Tech companies are shifting toward asset-heavy business models, demanding significantly more fundraising than before. Kevin McNeil noted these firms are "embarking upon almost unprecedented capital investment."
- Debt-Funded hyperscaler capex drove a 26 percent year-over-year spike in U.S. corporate bond issuance during the first half of 2026, while Oracle credit default swaps quadrupled since the middle of last year, reaching levels unseen since the Global Financial Crisis.
- Investor sentiment is on display this week as the market parses earnings reports from Amazon, Apple, Meta Platforms, and Microsoft to determine whether they will also raise capex forecasts.
- Near-Term demand for AI infrastructure remains strong, but industry analysts warn rapid capacity expansion poses growing risk if frontier model developers cannot raise external financing or stop subsidizing customers.
11 Articles
11 Articles
Signs of Strain Could Be Emerging in the AI Spending Boom
Cracks in Big Tech’s artificial intelligence-fueled spending binge could be forming across stocks and bonds. Wall Street was displeased last week when Alphabet and Tesla Motors raised their forecasts for capital expenditure—known as capex—for the rest of the year. While market watchers await spending updates from other AI hyperscalers as they release their latest earnings reports over the coming weeks, total capex in 2026 is expected to reach up…
Tesla is under significant pressure following the release of mixed quarterly results. Cash flow turned negative for the first time in over two years, reaching minus $1.1 billion in the second quarter. This is primarily due to high spending on AI and robotics. At the same time, a large portion of the reported quarterly profit of $1.1 billion—$763 million—comes from book gains resulting from the revaluation of its stake in SpaceX. Earnings per sha…
Tesla is still a buy, this analyst says
Roth Capital Partners analyst Craig Irwin says Tesla’s (Tesla Stock Quote, Chart, News, Analysts, Financials NASDAQ:TSLA) Q2 revenue beat showed healthy demand, while spending on Optimus and Robotaxi weighed on earnings. In a July 23 update, Irwin maintained his “Buy” rating and $505.00 target on Tesla. Tesla reported Q2 revenue of US$28.2-billion and adjusted EPS […] Source
Tesla's Terafab Could Avoid $1.5T in External Chip Spending by 2050, RBC Says
RBC Capital Markets lowered its price target on Tesla on Monday while maintaining an Outperform rating on the stock, according to a new research note obtained by PriceTarget. The firm trimmed the target by about 4%, to $480 from $500. The new target implies approximately a 55.2% upside based on Monday’s closing price of $309.22. Analyst Tom Narayan cut his standalone intrinsic value for Tesla — the figure that strips out any merger premium — to …
Tesla’s Terafab Could Avoid $1.5T in External Chip Spending by 2050, RBC Says
RBC Capital Markets lowered its price target on Tesla on Monday while maintaining an Outperform rating on the stock, according to a new research note obtained by PriceTarget. The firm trimmed the target by about 4%, to $480 from $500. The new target implies approximately a 55.2% upside based on Monday’s closing price of $309.22. Analyst Tom Narayan cut his standalone intrinsic value for Tesla — the figure that strips out any merger premium — to …
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