Tesla shares dip 2% as investors zero in on AI projects

Tesla shares fell 2.2% to $393.91 in midday trading, after a roughly 4% decline the previous session. The stock is down about 10% year to date. The broader market slipped as well, with the S&P 500 down 0.8% and the Dow Jones Industrial Average off 1.5% during the same session.

Tesla reported about 480,000 vehicle deliveries in the second quarter, roughly 70,000 above analyst estimates and 25% higher than a year earlier. Despite the delivery beat, investors focused on the company’s longer-term artificial intelligence projects rather than near-term vehicle volume.

Investor attention centers on Tesla’s robotaxi network and its Optimus humanoid robot. Tesla began offering an AI-trained robotaxi service in Austin about a year ago and now runs the service in three states. Market participants are awaiting clearer signs that autonomous ride-hailing will generate meaningful revenue and profit.

Tesla is developing the third generation of its Optimus humanoid robot. Investors are watching progress in robotics and autonomy for potential future contributions to revenue and earnings.

JPMorgan analyst Rajat Gupta called a potential merger between Tesla and SpaceX “strategically coherent on paper” but flagged significant regulatory and governance hurdles. Gupta said the two companies already share engineering talent and AI infrastructure and both benefit from the Terafab semiconductor facility in Texas.

Gupta identified China as a regulatory challenge because SpaceX holds U.S. government and defense contracts while Tesla has extensive manufacturing operations in the country. He also pointed to governance differences: Elon Musk controls roughly 85% of SpaceX’s voting power but about 20% of Tesla’s, a gap that could complicate any transaction and raise dilution concerns for Tesla shareholders. Gupta added that the size difference between the companies could make a deal resemble a SpaceX acquisition of Tesla rather than a merger of equals.

SpaceX’s recent public share sale raised about $85 billion at $135 per share, valuing the company at roughly $2 trillion. Tesla’s market capitalization stands near $1.25 trillion. Analysts note operational ties between the firms through shared AI work, engineering staff and the Terafab facility.

Tesla released its second-quarter delivery report earlier this month. Investor sentiment has shifted toward questions about when and how the company’s autonomous and robotics initiatives will contribute to revenue and earnings.