TSLA EPS Review: A Tsunami of New Product Launches Awaits

Tesla (TSLA) Q4 EPS Results

EPS vs. Wall St. Estimates: $0.50 actual, $0.45 expected (beat by 11%)

EPS: Down 32% year over year.

Revenue vs. Wall St. Estimates: Revenue of $24.901B actual, $24.78B expected.

Revenue: Down 3% year over year.

TSLA 4Q Operating Income: $1.41B (vs. $1.32B est.)

Q4 Deliveries Drop

Q4 vehicle deliveries dropped 15.6%. As I wrote prior to the Tesla EPS release, investors have already priced in a slowdown in the legacy EV business due to the loss of federal tax credits. Despite the slowdown in sales, margins increased by 4% - positive sign. 

Tesla to Acquire $2B of Preferred Stock in XAI

Tesla will invest in xAI to “bring AI into the physical world.”  Elon Musk’s xAI has experienced explosive growth in 2025-2026, driven by a $20 billion Series E round that pushed its valuation to roughly $230 billion. The company is rapidly scaling its infrastructure, including the "Colossus" supercomputer in Memphis, and has achieved significant user adoption, with 38 million monthly active users by late 2025. Shareholders have to be pleased with this for four reasons:

1.      With Tesla’s legacy EV business slowing, Tesla investors can take part in the scorching hot AI boom.

2.      xAI’s valuation recently boomed to $230 billion following a successful Series E

3.      Grok is consistently one of the best-performing AI models. (has backing from Nvidia, Fidelity, Qatar Investment Authority, etc.)

4.      Tesla investors will be able to leverage synergies between the two companies.

Tesla Energy Continues to Impress

Tesla Energy's total gross profit rose, both sequentially and year-over-year, to a record $1.1 billion, marking the fifth consecutive record quarter. Megapack 3 & Megablock production to start at the Megafactory Houston this year. These large-scale, integrated battery energy storage systems will be in high demand as hyperscalers seek to remain off the electric grid and generate and store their own power.

Optimus Timeline Confirmed

Tesla confirmed its timeline for the production of the Optimus Humanoid robot.

Cybercab & Semi Update

According to Tesla,“Preparations continue in North America for the production ramps of Tesla Semi and Cybercab, both commencing 1h26, and production of the next-generation roadster.” Tesla also unveiled the latest, refreshed design of the Semi. Earlier this week, Tesla signed a deal with Warren Buffett-backed Pilot Travel Centers to install Semi Chargers across 35 locations in the U.S. Construction of these Tesla Semi Chargers will begin in the first half of 2026.

Robotaxi/FSD Update

Tesla's Robotaxi fleet has cumulatively driven 650,000 miles since June 2025.

Tesla expects to expand to seven more robotaxi markets in 1H26.

For the first time, Tesla has revealed how many customers are subscribed to FSD (Supervised). Total subscribers:

 • 2025: 1.1 million

• 2024: 800K

• 2023: 600K

• 2022: 500K

 • 2021: 400K

Tesla is now generating about $1.3 billion a year from FSD subscriptions.

Analyst Comments

Investors are shifting their focus away from Tesla’s slowing "legacy EV business" (where deliveries dropped 15.6% and revenue fell 3% year-over-year) and are instead valuing the company based on three emerging pillars:

1.      Physical AI Company: Optimus, Robotaxis, FSD.

2.      Energy Company: With record profitability, new products in the pipeline, and the AI revolution just getting started, Tesla Energy is fast becoming an integral revenue stream for Tesla.

3.      A Broad Ecosystem: As Apple did with the iPhone, Mac, & iTunes, Tesla is doing with transportation, energy, and software.

Meanwhile, the company has confirmed the production and launch of several key future growth drivers that have been in the pipeline for years. Based on the pre-EPS and post-EPS price action, investors are signaling that they are keen to bet on Tesla’s future growth prospects and execution rather than dwell on the slowing growth in the EV business.

With that in mind, in order for the stock to continue rising, Tesla will need to:

·       Begin Optimus production on time.

·       Scale the robotaxi network and receive regulatory approval.

·       Ensure that the legacy EV business does not continue to bleed.

Perspective/Takeaways: Tesla is launching a tsunami of new products in 2026 (Cybercab, Megablock, Semi, and Roadster. Despite its slowing EV business and the cost of launching them, Tesla still has a pristine balance sheet, with more than $40 billion in cash on hand.

Bottom Line

Tesla is currently navigating a high-stakes transition, from its cooling EV business to a tsunami of innovation arriving in 2026. With a massive cash reserve of over $40 billion, the company has the runway to bridge the gap until the rollout of its next-generation products.

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