Tesla shares slip after earnings drop: Musk bets big on humanoid robots

Elon Musk’s company reports a 37% decline in third-quarter profits and plans a sharp rise in capital spending for artificial intelligence and robotics. Analysts remain cautious, warning that robot revenues may take time to materialize.

Tesla shares fell in Thursday trading after the company reported a 37% drop in third-quarter profits and announced that capital expenditures will rise significantly in 2026, as it ramps up investments in artificial intelligence and its humanoid robot project, Optimus.

During the earnings call, Chief Financial Officer Vaibhav Taneja said that capital spending will increase “substantially” to support Tesla’s long-term initiatives in AI and advanced robotics.

CEO Elon Musk acknowledged that the company is facing major engineering and production challenges in developing Optimus, particularly in designing sufficiently dexterous robotic hands and building a dedicated supply chain, which currently does not exist. He described the path to mass production as “an immense engineering challenge” that will demand significant time and resources.

Tesla’s stock fell 4.1% to $421.98 in pre-market trading on Thursday, after gaining 8.7% since the start of the year.

During the same call, Musk urged shareholders to approve a new compensation package that would keep him at the helm of the company. He expressed concern that a potential dilution of his voting control could one day leave him vulnerable, especially as Tesla expands aggressively into robotics.

Analysts at Oppenheimer wrote in a note on Thursday that rising research and development expenses, along with a higher tax rate, will likely weigh on Tesla’s profits. They also warned that significant delays in scaling up humanoid robot production are probable, limiting their contribution to revenue in the medium term.