{"id":924302,"date":"2026-08-02T10:12:32","date_gmt":"2026-08-02T15:12:32","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2026\/08\/02\/very-volatile-stock-a-caution-to-tesla-investors-as-musk-doubles-down-on-ai\/"},"modified":"2026-08-02T10:12:32","modified_gmt":"2026-08-02T15:12:32","slug":"very-volatile-stock-a-caution-to-tesla-investors-as-musk-doubles-down-on-ai","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2026\/08\/02\/very-volatile-stock-a-caution-to-tesla-investors-as-musk-doubles-down-on-ai\/","title":{"rendered":"&#8216;Very volatile stock&#8217;: A caution to Tesla investors as Musk doubles down on AI"},"content":{"rendered":"<p>Bitcoins <\/p>\n<div>\n<section>\n<h2>Bitcoins in brief<\/h2>\n<ul data-testid=\"highlights\">\n<li>Tesla&#8217;s profits have dropped after heavy investment in artificial intelligence weighed on earnings.<\/li>\n<li>Some experts say companies may have to invest heavily in AI to stay competitive in the future.<\/li>\n<\/ul>\n<\/section>\n<p><b><span>Financial analysts have warned not to expect much stability in Tesla&#8217;s share price after CEO Elon Musk defended billions of dollars of investment at the electric vehicle manufacturer, which has just seen one of its worst stock market falls in years.<\/span><\/b><\/p>\n<p><span>This week, Tesla reported second-quarter profit of $US1.1 billion ($1.57 billion), down about 5 per cent from a year earlier, as lower vehicle prices and heavy investment in artificial intelligence weighed on the company&#8217;s earnings.<\/span><\/p>\n<p><span>The result translated to 33 cents a share, well below analysts&#8217; expectations of 53 cents, while revenue rose 26 per cent to $28.2 billion.<\/span><\/p>\n<p><span>Although Tesla beat expectations for second-quarter vehicle deliveries earlier this month, the company said profitability was hit by lower vehicle selling prices, reduced revenue from regulatory credits and unspecified &#8220;energy warranty-related charges&#8221;.<\/span><\/p>\n<p><span>Capital expenditure more than doubled to $5.8 billion ($8.3 billion) during the quarter as Tesla accelerated investment in AI and manufacturing.<\/span><\/p>\n<div data-testid=\"embedded-newsletter\">\n<div>\n<div>\n<p><h2>Bitcoins News that makes sense<\/h2>\n<\/p>\n<\/div>\n<p><svg viewBox=\"0 0 141 35\"><g fill=\"none\" fill-rule=\"evenodd\"><path fill=\"#2E2E2E\" fill-rule=\"nonzero\" d=\"M138.770007,18.6462974 C138.686798,16.4844989 137.034065,15.5145147 135.050578,15.5145147 C133.509137,15.5145147 131.691027,16.1245478 131.691027,17.9808066 C131.691027,19.532572 133.454011,20.0871476 134.637655,20.3874555 L136.951897,20.9106401 C138.935384,21.2161799 141,22.3755569 141,24.8732399 C141,27.9767706 137.94312,29.1633532 135.299164,29.1633532 C131.993698,29.1633532 129.735622,27.6126342 129.459993,24.1209005 L131.194895,24.1209005 C131.333229,26.4762773 133.06709,27.6952973 135.382373,27.6952973 C137.007022,27.6952973 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3.82859576 13.9603956 1.7490567 19.2774374 1.8850547 23.0083318 1.8850547 23.0083318 1.8850547 23.0083318 4.66519958 20.6258269 7.15905039 15.6365231 4.24989029 22.9459368 4.43875793 28.0984528 4.43875793 28.0984528 4.43875793 28.0984528 8.29292123 24.7970989 11.6935362 17.8755196 7.64385499 27.9030578 7.90288296 35 7.90288296 35 7.90288296 35 13.9719183 29.8028223 18.787378 18.8656302 23.6028376 7.92810967 23.3122209 0 23.3122209 0\" \/><\/g><\/svg><\/div>\n<p>Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.<\/p>\n<\/div>\n<p><span>Tesla is embarking on a massive construction spree that Musk characterised on a conference call as probably the United States&#8217; &#8220;fastest industrial scale-up since World War Two&#8221;.<\/span><\/p>\n<p><span>The company said production of its Cybercab had begun in Texas, the Tesla Semi remained on track for 2026, and subscriptions to its Full Self-Driving driver-assistance program continued to grow.<\/span><\/p>\n<p><span>Asked about scaling Tesla&#8217;s robotaxi business, Musk said the company was focused on achieving near-perfect reliability.<\/span><\/p>\n<p><span>&#8220;How many nines of reliability do you need to scale?&#8221; Musk said. &#8220;Ideally, you want 99.99999, you know, per cent reliable.&#8221;<\/span><\/p>\n<h2 data-testid=\"embed-heading\">AI investments are &#8216;very expensive&#8217;<\/h2>\n<p><span>Tesla&#8217;s spending has drawn scrutiny from investors concerned about returns on its AI investments.<\/span><\/p>\n<p><span>CFRA Research analyst Garrett Nelson said uncertainty over the spending had weighed on Tesla shares.<\/span><\/p>\n<p><span>&#8220;They just haven&#8217;t been very transparent with [Wall] Street on the expected return of the dollars that have been spent.&#8221;<\/span><\/p>\n<p><span>Jai Mirchandani, chief executive of Elm Responsible Investments, said the spending reflected Tesla&#8217;s long-term strategy.<\/span><\/p>\n<p><span>&#8220;The company and Musk is saying that it&#8217;s one of the best investment opportunities and that&#8217;s why they&#8217;re investing so heavily in AI and robotics primarily,&#8221; he told SBS News.<\/span><\/p>\n<p><span>&#8220;As we&#8217;ve seen from companies like even Google and Microsoft and all the tech leaders, it&#8217;s very expensive, and it requires a lot of capital to build the AI infrastructure and technology.<\/span><\/p>\n<p><span>&#8220;And if you want to succeed in this space, our view is that you have to be investing in AI and innovation.&#8221;<\/span><\/p>\n<p><span>Mirchandani described AI as a revolutionary technology that needs &#8220;a lot of capital investment&#8221;. <\/span><\/p>\n<h2 data-testid=\"embed-heading\">Musk defends Tesla spending<\/h2>\n<p><span>Musk said Tesla&#8217;s capital expenditure (capex) was justified, saying the company &#8220;should be spending on capex as fast as we can spend &#8230; without it being too wasteful&#8221;.<\/span><\/p>\n<p><span>&#8220;It&#8217;s OK to be a little less capital efficient if we get things done sooner.&#8221;<\/span><\/p>\n<p><span>Tesla&#8217;s chief financial officer Vaibhav Taneja said research and development costs would &#8220;continue to grow in 2026 and beyond&#8221;.<\/span><\/p>\n<p><span>Speculation has also grown about closer ties between Tesla and SpaceX following the rocket company&#8217;s stock market debut, although Musk declined to discuss any potential combination.<\/span><\/p>\n<p><span>&#8220;There&#8217;s more and more overlap,&#8221; said Musk. <\/span><\/p>\n<p><span>&#8220;Obviously, we can&#8217;t talk about combining companies and that kind of thing on an earnings call. It&#8217;s got to be done with the appropriate process.&#8221;<\/span><\/p>\n<p><span>Mirchandani cautioned investors about Tesla&#8217;s share price movements.<\/span><\/p>\n<p><span>&#8220;The reality is that Tesla is a very volatile stock. And so I&#8217;d sort of just be mindful of that.&#8221;<\/span><\/p>\n<h2 data-testid=\"embed-heading\">Watch and see<\/h2>\n<p><span>Stockbroker Richard Hemming said investors were increasingly rewarding companies that continued to innovate.<\/span><\/p>\n<p><span>&#8220;I think the innovation part of it is more worrying for investors for companies that don&#8217;t innovate,&#8221; he told SBS News.<\/span><\/p>\n<p><span>&#8220;I think that, in the next reporting season, it&#8217;s going to be interesting to see how companies &#8230; are going in the sales line. &#8220;<\/span><\/p>\n<p><span>He said Australia&#8217;s upcoming corporate reporting season would provide an important test of company profitability.<\/span><\/p>\n<p><span>&#8220;We are seeing sort of signs, especially in Australia, that productivity&#8217;s falling,&#8221; he said.<\/span><\/p>\n<p><span>&#8220;Productivity in Australia has been under a lot of pressure versus the rest of the world because I guess we&#8217;re not seeing the kind of innovation that they&#8217;re seeing in the US.<\/span><\/p>\n<p><span>&#8220;So definitely, the upcoming results are going to be very, very important. &#8220;<\/span><\/p>\n<p><i><span>Additional reporting by Agence France-Presse.<\/span><\/i><\/p>\n<hr>\n<p><b><i><span>For the latest from SBS News, <\/span><\/i><\/b><a data-variant=\"textBodyLink\" data-clickevent=\"{\"elementType\":\"LinkEmbed\",\"clickURL\":\"https:\/\/www.sbs.com.au\/news\/sbs-news-app?cid=sbsnews:cm:editorial:aw:election2025:appush:hi\",\"clickType\":\"clickSource\"}\" rel=\"noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.sbs.com.au\/news\/sbs-news-app?cid=sbsnews:cm:editorial:aw:election2025:appush:hi\"><span><b><i>download our app<\/i><\/b><\/span><\/a><span> <\/span><b><i><span>and <\/span><\/i><\/b><a data-variant=\"textBodyLink\" data-clickevent=\"{\"elementType\":\"LinkEmbed\",\"clickURL\":\"https:\/\/www.sbs.com.au\/news\/news-newsletter-sign-up?cid=sbsnews:cm:editorial:aw:election2025:newsletterpush:hi\",\"clickType\":\"clickSource\"}\" rel=\"noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.sbs.com.au\/news\/news-newsletter-sign-up?cid=sbsnews:cm:editorial:aw:election2025:newsletterpush:hi\"><span><b><i>subscribe to our newsletter<\/i><\/b><\/span><\/a><b><i><span>.<\/span><\/i><\/b><\/p>\n<\/div>\n<p> Sharie Antes <a href=\"https:\/\/www.sbs.com.au\/news\/article\/very-volatile-stock-musk-doubles-down-on-ai-as-tesla-profits-slip\/yd054sqt1\" class=\"button purchase\" rel=\"nofollow noopener\" target=\"_blank\">Read More<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>in brief Tesla&#8217;s profits have dropped after heavy investment in artificial intelligence weighed on earnings. Some experts say companies may have to invest heavily in AI to stay competitive in the future. Financial analysts have warned not to expect much stability in Tesla&#8217;s share price after CEO Elon Musk defended billions of dollars of investment<\/p>\n","protected":false},"author":1,"featured_media":924303,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[112,26843],"tags":[11476],"class_list":["post-924302","post","type-post","status-publish","format-standard","has-post-thumbnail","category-stock","category-volatile","tag-bitcoins"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/924302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=924302"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/924302\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/924303"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=924302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=924302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=924302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}