Tesla Q3 Earnings Preview: Analysts Divided on EV Maker’s Outlook Amid AI Hype

Divided Expectations Ahead of Tesla’s Earnings Report

Tesla is reportedly set to release third-quarter financial results after markets close Wednesday, with analysts expressing sharply contrasting views about the electric vehicle maker’s prospects. According to sources familiar with analyst surveys, expectations point toward earnings of 56 cents per share, representing a 22% year-over-year increase, on revenue of $26.54 billion. These projections come despite Tesla’s second-quarter miss on both top and bottom lines, suggesting cautious optimism among some market observers.

Divided Expectations Ahead of Tesla’s Earnings Report
Analyst Sentiment Reflects Broader Market Division
Bearish Perspectives Highlight Downside Risks
Neutral to Cautiously Optimistic Views
Bullish Positions Point to Long-Term Potential
Key Factors Influencing Market Reaction

Analyst Sentiment Reflects Broader Market Division

Market data indicates significant divergence in how analysts view Tesla’s stock potential. Reports show that among 54 covering analysts, 26 reportedly maintain buy or strong buy ratings, while 17 assign hold ratings and 11 consider the stock an underperform or sell. This division reflects broader debates about whether Tesla’s current valuation adequately reflects its fundamental business performance versus its potential in artificial intelligence and autonomous vehicle technology.

According to industry analysis, Tesla shares have recovered significantly from their 2025 lows reached in April, now trading near all-time highs with a 4% year-to-date gain. This recovery reportedly coincided with Elon Musk’s departure from his public position within the Trump administration, though analysts suggest multiple factors have contributed to the stock’s performance.

Bearish Perspectives Highlight Downside Risks

Several prominent firms maintain cautious stances toward Tesla’s valuation. Wells Fargo analysts reportedly assigned an underweight rating with a $120 price target, suggesting potential downside of approximately 73%. Sources indicate their analysis acknowledges strong deliveries but expresses concern about future growth prospects, noting that full self-driving technology faces another NHTSA investigation and that robotics commercialization could be a decade away.

Similarly, UBS maintained a sell rating despite raising its price target from $215 to $247, still representing substantial downside from current levels. According to their analysis, Tesla’s stock price appears disconnected from fundamentals, with stretched valuation metrics. However, they reportedly acknowledge that investor focus on narrative over numbers could sustain momentum, particularly with potential positive developments around robotaxis and the upcoming annual meeting.

Neutral to Cautiously Optimistic Views

Barclays maintained an equal weight rating while raising its price target from $275 to $350, still below current trading levels. Analysis suggests that fundamentals have taken a backseat to autonomous vehicle and artificial intelligence narratives, with the stock potentially vulnerable to reminders of near-term challenges. However, they reportedly expect any weakness might be temporary as excitement builds toward the November 6 annual general meeting.

Cantor Fitzgerald maintained an overweight rating with a $355 target, acknowledging Tesla’s strong delivery numbers while anticipating weaker performance in the fourth quarter. According to their assessment, the delivery beat was primarily driven by consumers rushing to purchase vehicles before the expiration of the $7,500 federal EV tax credit on September 30.

Bullish Positions Point to Long-Term Potential

More optimistic analysts point to Tesla’s positioning in emerging technologies. TD Cowen maintained a buy rating with a $509 price target, approximately 15% above recent levels. Their analysis reportedly suggests that despite the stock’s recent rally, 2026 expectations remain muted given significant electric vehicle market pressures, while the CEO compensation proposal has increased confidence in the long-term story.

Melius Research maintained the most bullish stance with a $520 price target, representing 17% potential upside. According to their perspective, Tesla shares represent a “must own” investment due to the disruptive potential of artificial intelligence in automotive and transportation industries. Their valuation reportedly assumes successful implementation of autonomy in passenger cars, potentially capturing significant rideshare market share.

Key Factors Influencing Market Reaction

Analysts suggest several critical factors will influence market reaction to Tesla’s earnings report. According to industry observers, investors will closely monitor:

Post-credit demand: Commentary about U.S. vehicle demand following the expiration of federal tax incentives
Robotaxi updates: Any developments regarding Tesla’s autonomous vehicle network plans
Margin performance: Automotive revenue trends after last quarter’s decline from $19.9 billion to $16.7 billion year-over-year
Future guidance: Management commentary about delivery expectations for the crucial fourth quarter

The upcoming November annual meeting reportedly represents another potential catalyst, with analysts expecting Tesla to reinforce its future growth narrative around autonomy and artificial intelligence initiatives. According to market observers, the company’s ability to maintain positive news flow could prove crucial for sustaining investor enthusiasm amid questions about near-term fundamentals.