Tesla Inc. (TSLA) earned 48 cents a share on an adjusted basis versus 43 cents expected in the most recent quarter. Revenue came in at $28.05 billion versus $27.9 billion expected. But if all you read last week were the headlines, you’d think Tesla struck out, notes Keith Fitz-Gerald, editor of 5 With Fitz.
Auto revenue down. Energy revenue down. Profits down. Predictably, the spreadsheet gang fixated on everything that went down. Terrible right? Wrong. Smart investors will look at why.
(Editor’s Note: Keith will be speaking at the 2027 MoneyShow/TradersEXPO Las Vegas, scheduled for Feb. 21-24. Click HERE to register.)
Tesla Inc. (TSLA)
Source: TradingView
Research and development spending jumped 69% to $2.76 billion, most of it on AI, robots, and the infrastructure behind them. Stuff that will show up on the sheets a few quarters from now exactly as it did with SpaceX (SPCX), which transitioned from a $1.05 billion loss last year to a $4.4 billion profit this quarter.
I’ve talked about how modern accounting rules can’t adequately capture what’s happening, so I won’t repeat all that today. As plainly and respectfully as I can put it, Tesla is buying its future with its own money.
Gross margin improved to 19.6%, up from 18% a year ago and 16.8% last quarter. This matters because gross margin is what’s left from every sales dollar after paying to build the product. Rising gross margin while spending like crazy on the future is no easy feat.
