Tesla's profits fell 18% to 33c a share in the second quarter, despite a 28% increase in revenue to $28.2 billion. The decline in profits was due to increased spending on AI and research, sparking concerns about the company's financial stability and ability to meet its ambitious goals.
The company spent $5.8 billion in capital expenditures in the second quarter and more than doubled its onsite compute in Texas during the first half of 2026. Active FSD subscriptions hit 1.48 million in the second quarter, up 56% year-over-year, and the company deployed 13.5 gigawatt hours of storage in 2Q, up more than 50% from the prior three months.
However, the company's automotive gross margins were 16.3% in the second quarter, down from 19.2% in Q1 of this year. The earnings report, released on July 22, 2026, led to a decline in the company's stock price in after-hours trading.
Tesla's increased spending on AI and research has raised questions about the company's ability to balance its investments with its need to generate profits. While the company has seen growth in certain areas, such as FSD subscriptions and storage deployment, the decline in profits has created uncertainty about its financial stability.
As Tesla continues to invest heavily in AI and research, the implications for the company's financial stability are still unclear. The company's stock price is likely to remain volatile in the coming days as investors and analysts assess the impact of the earnings miss.
The company's ability to meet its ambitious goals, including its investments in AI and research, will be closely watched by investors and analysts in the coming months. With the earnings report sparking concerns about Tesla's financial stability, the company will need to demonstrate its ability to balance its investments with its need to generate profits.