Tesla reports second-quarter earnings Wednesday with the stock down 22% from its 52-week high but still trading at 360 times trailing earnings, a multiple that prices in years of flawless execution on autonomy while the core auto business compresses margins. The electric-car maker delivered 480,126 vehicles in the quarter, up 25% from 384,122 a year earlier and the highest quarterly total since the third quarter of 2025. Delivery growth accelerated from a 6% year-over-year increase in the first quarter. Yet the share price sits around $391, well below the $498.83 peak.
Wells Fargo last week raised its price target to $130 from $125 while maintaining an underweight rating, implying a 67% decline from current levels. The firm argues Tesla is selling more cars than at any point since the third quarter of 2025 but earning less on each one, with price cuts and rising input costs, memory chips, copper, lithium, eating the gains. First-quarter operating margin fell to 4.2% from 5.7% in the fourth quarter of 2025. Net income was $477 million on $22.4 billion of revenue, yielding earnings per share of $0.13. Over the trailing 12 months, Tesla has earned $1.09 per share.
The bull case rests on volume and the other businesses. First-quarter revenue rose 16% year over year to $22.4 billion, with services and other revenue climbing 42%. Energy storage deployments rebounded to 13.5 gigawatt-hours in the second quarter, up 41% from a year earlier and up sharply from 8.8 gigawatt-hours in the first quarter, after energy revenue fell 12% year over year in the first quarter. Full Self-Driving (Supervised) subscriptions reached 1.28 million in the first quarter, up 51% year over year. The company launched unsupervised robotaxi rides in Dallas and Houston in April and received approval for FSD (Supervised) in the Netherlands the same month. Cash and short-term investments stood at $44.7 billion at the end of March, up from $44.1 billion at the end of 2025.
That is the entire debate in one number. At 360 times trailing earnings, the stock isn't pricing in a good quarter on Wednesday; it's pricing in a robotaxi business that scales into a major profit stream while the car business stays healthy the whole way. Even at Wells Fargo's $130 target, Tesla would trade at roughly 120 times earnings, still a premium growth multiple. Wednesday's report can't fully settle this because the bear case is about profits and the bull case, so far, is mostly about volume.
Watch whether operating margin recovers from 4.2%. Watch what the second-quarter deliveries did to pricing. And watch energy, where the deployment rebound needs to show up in revenue and profit. A 67% plunge would probably require the market to stop paying for the autonomy story almost entirely, and the company to keep missing on margins. That's a high bar. But the gap between what Tesla delivers and what it earns per delivery is the only number that matters now.