(Saul Loeb/Getty Images)

Tesla bulls are latching on to silver linings after the worst-ever drop in deliveries

Shares are rising, suggesting investors are looking past the bloodbath in sales and instead focusing on an AI-enabled future.

Rani Molla

7/2/25 10:54AM

There are a bunch of different ways to slice the Tesla delivery numbers that came out this morning. So far, traders are picking the optimistic ones.

Yes, Tesla reported its biggest drop in deliveries ever, having sold about 60,000 fewer vehicles than it did last year in Q2. And yes, the 384,000 deliveries fell short of analysts’ expectations, which have been getting revised down all quarter long. (Bloomberg’s consensus estimate was 389,000; FactSet’s was 387,000).

But the stock is up 5% today as the bulls are latching on to silver linings.

For example, Wedbush Securities analyst and Tesla bull Dan Ives points out that though deliveries fell short of consensus estimates, they were better than the “whisper number” of 365,000 — the unofficial, unpublished number that Wall Street really expected.

The miss versus consensus was, overall, pretty narrow, coming in about 1% under — a narrower miss than last quarter. Here’s how deliveries have come in compared to estimates over the past few years:

As we’ve written before, Tesla often doesn’t trade on fundamentals — and that disparity might be stronger than ever.

Production also came in higher than expected, despite the company having some planned outages at its factories on the books. That could be optimistically read as the company thinking it’ll see demand tick up.

Another way to read all this? Tesla bulls are buying what CEO Elon Musk is selling. “The future of the company is fundamentally based on large-scale autonomous cars and large scale and large volume, vast numbers of autonomous humanoid robots,” Musk said on the latest earnings call, reiterating a point he’s made again and again. In other words: don’t miss the forest (autonomy) for the trees (struggling vehicle sales).

🔥 Tesla’s delivery dip? Just background noise in a much bigger AI symphony.

Q2 deliveries may fall up to 19%, but the smart money isn’t sweating. Musk’s robotaxi pivot and Tesla’s $16B war chest suggest short-term fear, long-term setup. The real rerate comes when autonomy…
— Evelio Silvera (@eveliosilvera) July 2, 2025

Tesla’s small but mostly successful robotaxi launch last month in Austin is giving bulls enough hope that the future Musk is painting may actually come to pass.

As Ives wrote today, “Autonomous remains the biggest transformation to the auto industry in modern day history and in our view, Tesla will own the autonomous market in the US with the initial launch of unsupervised FSD in Austin.”

And failing everything else, maybe investors are just optimistic because Tesla’s CEO isn’t getting flamed today by the president of the United States, which caused the stock to tank yesterday.

US stocks end volatile week on a positive note

The S&P 500 and Nasdaq 100 both ended well in the green, while the Russell 2000 suffered a loss.

Toby Bochan3s

Matt Phillips2h

Margins, and selling the news: analysts look to explain Oracle's tumble

The somewhat counterintuitive tumble in Oracle shares continued into afternoon trading Friday, despite Wall Street analysts’ more-or-less favorable reaction to Oracle’s investor day presentation Thursday, where executives said the company’s AI cloud business would eventually sport margins of between 30%-40%, far better than the figures reported by The Information back on Sept. 7.

And yet, the stock is on its way to its worst day in the last six months. What gives?

Gil Lauria, who covers Oracle for D.A. Davidson & Co. — who has it at “hold” with a $300 price target — has a theory, telling Sherwood:

“Investors are disappointed that the entire growth acceleration in Oracle is from the Oracle Cloud Infrastructure business, and that Oracle expects the rest of the business to grow low single digits.

The other disappointment came from Oracle acknowledging that the GPU rental business only had 30-40% gross margins, far lower than the 80% gross margins for the rest of the business.”

Other analysts we’ve chatted with on background say they’re not convinced the margin story is the source of today’s slump, pointing to the also plausible explanation that the drop might just be a sign traders bought the stock ahead of the presentation to analysts on Thursday anticipating positive announcements, and now they’re selling simply selling the news.

Analysts generally like what they heard from Oracle, but shares are down

Gil Lauria, who covers Oracle for D.A. Davidson & Co. — who has it at “hold” with a $300 price target — has a theory, telling Sherwood:

“Investors are disappointed that the entire growth acceleration in Oracle is from the Oracle Cloud Infrastructure business, and that Oracle expects the rest of the business to grow low single digits.

The other disappointment came from Oracle acknowledging that the GPU rental business only had 30-40% gross margins, far lower than the 80% gross margins for the rest of the business.”

Jon Keegan5h

Analysts generally like what they heard from Oracle, but shares are down

The big news out from the Oracle AI World conference was broadly positive: that margins on cloud infrastructure can be as high as 35%, and that the company predicts $166 billion in infrastructure revenue by 2030.

And in the wake of that news, today UBS raised its price target for Oracle shares to $380 from $360, saying they are undervalued.

But investors appear to have some concerns about Oracle’s huge capex plans, which are fueled by huge AI infrastructure deals with OpenAI and Meta, as shares dropped over 7% in Friday trading.

Analysts have pointed to Oracle’s high cash burn as it pursues its AI build-out and potential financing needs as flies in the ointment that could blunt the impact of the company’s strong longer-term growth forecasts.

On Friday, Jeffries analysts wrote:

“Questions remain about ORCL’s capex requirements to meet growing demand, as there was no forward-looking commentary on capex at the Analyst Day. Capex will need to ramp in line with [Oracle cloud infrastructure] revenue growth, raising concerns about ORCL’s financing options to support this expansion.”

However, if that’s the reason why the stock is getting hit today, it would mark a distinct change in how investors are evaluating the AI trade. Companies have tended to be increasingly rewarded for their aggressive capex commitments to enhance the boom, based on optimism that investments in this would-be revolutionary technology will bear fruit.

Friday’s dip comes on the back of a strong run leading up to the yesterday’s investor conference, fueled by a flurry of AI headlines. Oracle shares have gained over 18% in the past three months and more than 70% so far this year, well outpacing the Nasdaq’s approximately 7% and 16% rise over the same time periods.

Matt Phillips6h

AST SpaceMobile drops after Barclays cuts rating to “underweight”

AST SpaceMobile, which provides cellular services from space, dove in early trading after Barclays analysts cut their rating on the shares to “underweight” (essentially a sell) from “overweight” (or a buy), citing “excessive” valuation on the still money-burning company. The fact that analysts went from “buy” to “sell” — with no momentary stop at a “hold” or “neutral” rating — makes it a fairly rare “double downgrade.”

They wrote:

“Valuation has run ahead of fundamentals... In our last update, we increased our price target from $38 to $60 as we took a more constructive view on pricing; we found it supportive that TMUS/Starlink launched a text only service for $10 per month and believe that AST products which will be richer (text, call, broadband) could see higher prices points. Since then the stock price has doubled from $48 to $95.7.”

With the shares up almost 120% over the last month through Thursday, and a price-to-forward-sales ratio of 140x — the Nasdaq Composite is around 5x — the stock might be due for a cooling-off period.