Wall Street is anticipating Tesla’s (NASDAQ: TSLA) Q2 earnings report, set for release on July 23, with an artificial intelligence (AI) model projecting limited upside for the stock.
The earnings come amid a period of heightened uncertainty for Tesla, driven by declining sales, intensifying competition, and CEO Elon Musk’s increasingly polarizing political stance.
For the quarter, Tesla is expected to report revenue of $22.79 billion, representing a 9% decline from $25.05 billion year-over-year. Analysts forecast adjusted EPS of $0.43, translating to adjusted net income of $1.513 billion.
It’s also worth noting that in Q2, Tesla’s global vehicle deliveries fell 13.5% year-over-year to 384,122 units.
Despite broader challenges, Tesla shares have shown resilience, maintaining their position above $300. At press time, TSLA was up 1% at $332, though the stock remains down 12% year-to-date.
According to a price forecast generated by OpenAI’s ChatGPT, Tesla stock is most likely to remain above $300 following the earnings release.
Tesla stock fundamentals
The AI model noted weakening sentiment around Tesla, partly due to Musk’s political activity, which analysts say is alienating some consumers. Rising inventory levels, following the production of more vehicles than were delivered in Q2, also pose risks to margins and cash flow.
On the upside, the AI model noted that growing Full Self-Driving (FSD) subscriptions and momentum in Tesla’s energy and services segments may offer support.
However, ChatGPT noted that without a strong earnings beat, a clear roadmap for its robotaxi program, or an affordable EV such as the Model 2, the outlook remains cautious. At 38x forward earnings, the AI tool noted that much of Tesla’s future growth appears priced in.
Tesla price prediction after Q2 earnings
For specific price levels following the earnings, ChatGPT assigned the highest probability to a muted outcome, earnings in line with expectations, and a modest pullback in the stock to the $315 and $325 range.
In a bullish scenario, where Tesla beats both revenue and earnings forecasts and unveils a credible robotaxi timeline, shares could rally toward $350 and $370. On the downside, a miss paired with vague forward guidance could cause the stock to fall to the $290 and $305 range.
In general, the market will be closely listening for updates on autonomy, Q3 margin, and delivery guidance, as well as progress in key markets such as China and Europe. Without clear momentum in these areas, ChatGPT stated that Tesla’s stock may struggle to maintain its position.
Featured image via Shutterstock
