Tesla's stock price plummeted over 12% as Q2 net profit missed expectations and gross margin continued to decline

According to data from MSX.COM, Tesla's stock price has expanded its decline to 12%, trading at $329.015 per share, with a total market value of $1.24 trillion.

The financial report shows that Tesla achieved revenue of $28.24 billion in the second quarter, exceeding market expectations, representing a 26% year-over-year increase, marking the first time in three years that revenue growth has surpassed 20%. However, operating profit for the second quarter was only $398 million, far below the market expectation of $1.39 billion; adjusted earnings per share were $0.33, a year-over-year decline of 18%, also significantly missing expectations; the gross margin was 16.8%, lower than the analysts' expectation of 19.4%, while the overall gross margin for the first quarter was 21.1%.

Notably, Tesla's free cash flow in the second quarter was -$1.09 billion, marking its first negative quarter since the first quarter of 2024. Tesla executives stated that the negative free cash flow was due to capital expenditure more than doubling quarter-over-quarter in the second quarter. They expect capital expenditure to continue growing over the next two to three years and reiterated that capital expenditure this year will exceed $25 billion.