TSLA has also dropped 8% over the past month and 6% over three months, while Apple, Alphabet, Nvidia and Amazon remain positive for the year.
- Tesla reports Q2 results after Wednesday’s close, with investors looking beyond the headline numbers for stronger updates on Robotaxi, Cybercab and Optimus.
- Analysts expect revenue of $26.36 billion, up 18% from the previous quarter, adjusted EPS of $0.54 and EBITDA of $3.97 billion.
- Retail sentiment has turned bullish ahead of the print, with traders betting that even modestly better Robotaxi or Optimus news could trigger a rebound.
Shares of Tesla, Inc. (TSLA) have officially fallen below Microsoft, Inc. (MSFT) to become the Magnificent Seven’s worst-performing stock of 2026, but retail traders are betting that CEO Elon Musk can turn the tables with a blockbuster Q2 update.
TSLA shares are down 18% year-to-date, slightly worse than Microsoft’s 16% decline.
Tesla Trails Mag Seven Ahead Of Earnings
Tesla reports after Wednesday’s closing bell, with Wall Street expecting a sharp sequential improvement in revenue and earnings. Yet with TSLA carrying the group’s richest valuation, solid numbers alone may not be enough. Investors want fresh evidence that Robotaxi, Cybercab and Optimus can become Tesla’s next major growth engines.
TSLA has also lost 8% over the past month and 6% over three months. Meanwhile, Apple has gained 20% this year, and Alphabet, Nvidia and Amazon are up 13%, 9% and 8%, respectively.
Tesla also trades at 163x forward earnings, far above Microsoft at 21.7x and Nvidia at 20.4x, raising the pressure on Musk to justify its premium. The underperformance came even as individual investors bought about $52 million of Microsoft shares in July, making it the most popular Mag Seven member, according to Vanda Research. Tesla attracted only about $20 million, trailing Microsoft, Alphabet and Amazon.
However, Citi says that the Magnificent Seven no longer functions as a coherent market group. “In our view, the Mag 7 is dead as a construct for assessing large-cap growth dynamics, and it has been for some time,” Citi said. The research firm divides the market into cyclical, defensive and growth clusters. Its growth group, which captures megacaps alongside the broader AI infrastructure trade, is expected to generate 42% earnings growth in 2026, versus 24% for the S&P 500.
Wall Street Expects A Solid Quarter For TSLA
Analysts expect Tesla to report $26.36 billion in revenue, up 18% from the previous quarter, according to Koyfin. Adjusted earnings per share (EPS) are projected to rise 31% to $0.54, while earnings before interest, taxes, depreciation, and amortization (EBITDA) is expected to increase 8% to $3.97 billion.
Morningstar raised its fair-value estimate to $450 from $425, implying about 18% upside from Friday’s level. The firm expects Tesla deliveries to grow roughly 10% in 2026 to nearly 1.8 million vehicles, helped by lower-priced Model Y and Model 3 variants. The forecast should support “higher automotive gross profit margins,” Morningstar said, with margins excluding regulatory credits expected in the high teens.
Morgan Stanley also said strong auto and energy deliveries had positioned Tesla for “a solid quarter,” raising its price target to $417. Barclays lifted its target to $370, citing improving vehicle fundamentals, while Wells Fargo remained bearish with a $130 target and an ‘Underweight’ rating. Despite improving auto expectations, analysts increasingly view Tesla’s future valuation as dependent on autonomy and robotics. Meanwhile, Cantor Fitzgerald reiterated its ‘Overweight’ rating, saying: “We continue to expect TSLA will have the ability to scale rapidly following commercialization… and capture meaningful market share.”
TSLA Retail Bets On A Musk Surprise
On the other hand, retail traders are convinced that Wednesday could deliver the catalyst Wall Street is waiting for. Sentiment on Stocktwits flipped to ‘bullish’ in the week leading up to Tesla’s Q2 report, rebounding from ‘extremely bearish’ a month earlier, when fears of a potential SpaceX merger ahead of its IPO weighed on retail confidence.
“One thing I know is that Elon likes to prove people wrong. We should expect him to produce something big on Wednesday night,” one user said. Another user said, “A shred of better-than-expected news on Robotaxi or Optimus and this thing shoots 30% in a week.”
Other investors called the decline a buying opportunity, with one saying they were holding with “diamond hands and adding,” while another predicted “one hell of an earnings report.”
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