Tesla shares closed at $313.03 on Friday, down nearly 18% for the week — the steepest weekly loss since 2022. The selloff accelerated after the company's second-quarter earnings report revealed a sharp miss on profits and a dramatic jump in capital spending, raising fresh questions about the pace of its AI and robotaxi investments.
Earnings Miss and Margin Squeeze
Q2 revenue came in at $28.24 billion, up 26% year-over-year and above analyst estimates. But adjusted earnings per share of $0.33 missed the $0.51 consensus, and operating margin shrank to just 1.4%. Free cash flow turned negative for the first time since early 2024, as capital spending surged 142% to $5.79 billion, largely directed at AI infrastructure, Optimus robots, and robotaxi production.
Chart Breakdowns Point Lower
Two separate technical patterns now point to further downside. The weekly chart shows the $350 support zone lost — that level now flips to resistance. The next significant demand zone sits around $260. On the daily chart, a descending parallel channel from May highs broke below its lower boundary on July 23 with high volume, projecting a target of $296.16. A bullish cup-and-handle pattern that once projected a $759 target remains alive but requires a weekly close above $470 to activate.
Analyst: Capex Surge a 'Timing Problem'
Wedbush analyst Dan Ives said the capital expenditure surge is a timing problem, not a broken thesis. He called it an 'arms race' that is only 15% through. The comment suggests the market is punishing Tesla for near-term spending without immediate payoff, but Ives sees the long-term strategy intact.
What Bulls Need to Do
To invalidate the bearish structure, bulls need to reclaim $350 and re-enter the descending channel. Without that, the path of least resistance remains lower. The next major test will be whether the stock can hold above $296 — the daily chart target — or if it slides further toward the $260 demand zone.
