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Tesla Drops on Missed Earnings Despite Record Revenue Gains
Tesla’s stock declined after earnings underperformed despite record revenue, highlighting margin pressures and cautious investor sentiment across the broader EV sector.
Tesla shares fell 3.5% after quarterly earnings missed analyst expectations even as revenue reached a record US$27.9 billion. Rising input costs and weaker automotive margins offset delivery growth. Analysts said price cuts across global markets and ongoing production adjustments weighed on profitability. The company reaffirmed its long-term output goals but signaled tighter cost controls heading into 2026. Broader EV sector sentiment softened as investors questioned near-term valuation premiums, prompting some funds to rotate into traditional automakers and energy stocks for stability.