Tesla Q1 Earnings Debrief
Tesla just reported Q1 earnings. The stock traded flat after hours, with investors mostly shrugging at the report. It’s currently hovering right around its 200-day moving average of $400.
The focus was clearly on Optimus, the company’s humanoid robot that Musk believes will be the “biggest product ever”. They also warned about an increase in…you guessed it…capital expenditures . They feel its a necessary step to wrap their products in AI. That said, the story we’re tracking with Tesla is something far less flashy.
The most overlooked part of Tesla’s business is it’s Energy Generation and Storage division. It’s revenue has been growing aggressively the last few quarters:
- Q3: +44%
- Q4: +25%
- Last 8 Quarter Average Growth Rate: +50%
Even though it took a -12% hit this quarter, it may end up being one of their most important lines of business, especially as demand for power infrastructure accelerates.
At the same time, Tesla is dramatically increasing its spending.
Capital expenditures jumped 67% in Q1, and the company is now guiding toward roughly $25 billion in CapEx for the full year. That’s a 25% increase from prior guidance and nearly triple what it spent last year. Looks like the analyst community is already going to have to up that $650 billion projection for 2026.
Tesla is leaning hard into AI, robotics, and the infrastructure required to support both. Whether it’s training models, scaling autonomy, or powering future products like Optimus, the common denominator is physical AI which requires compute and energy.
On the positive side, the company delivered stable financial results. Profits rose 17%, and Tesla beat expectations on both revenue and earnings. Revenue came in at $22.4 billion versus $22.2 billion expected, while EPS landed at $0.41 compared to $0.30 expected.