Tesla shares fell 14.5 percent Thursday to close below $320 after the company posted its first profit miss in more than two years and burned $1.1 billion in free cash flow, wiping $19 billion from Elon Musk’s fortune in a single session. The automaker delivered a record number of vehicles in the June quarter, yet higher operating expenses tied to artificial intelligence, lower average selling prices and weaker regulatory credit revenue combined to push profitability into reverse.
Capex doubles as profit misses
Capital expenditures more than doubled both year-on-year and sequentially to $5.8 billion in the June quarter, a pace that caught analysts off guard. They had modeled free cash flow of positive $3.3 billion; instead the company reported negative $1.1 billion. Musk characterized the outlay as a “massive capex year” on the post-earnings call and said he was confident the investments in self-driving technology, robotaxis and humanoid robots would yield “incredible returns.” Investors are currently pricing the opposite.
The trillionaire that wasn't
Forbes now values Musk’s net worth below $732 billion, a sharp comedown from last month when SpaceX’s market debut briefly made him the first-ever trillionaire on paper. That rally fizzled quickly, and SpaceX shares have since more than halved from their lifetime high. Tesla stock is down roughly 27 percent over the past six months, suggesting the market’s patience for narrative-driven valuation is wearing thin across the Musk empire.
Robotaxi timeline now the only catalyst
The company is expanding unsupervised robotaxi services, but the timeline for meaningful revenue remains opaque. With core auto margins pressured by price cuts and credit revenue fading, the burden of proof has shifted entirely to the autonomy bet. Alphabet’s six percent drop on the same session underscores a broader reassessment of AI capital intensity across mega-cap tech. The next quarterly update will be judged almost exclusively on whether the cash burn inflects or accelerates.