TLDR
- Tesla stock fell 0.4% in premarket trading Thursday to $402.50, pulled lower by Alphabet’s earnings miss.
- Alphabet dropped 10.8% after its Google search business missed numbers, hitting the wider AI trade.
- SpaceX fell 1.7%, and Caterpillar dropped about 10% despite beating third-quarter estimates.
- Barclays upgraded Tesla to Overweight with a $450 target, while the average analyst target sits at $414.51.
- Amazon reports after Thursday’s close and could shift the mood in AI stocks.
Tesla (TSLA) stock slipped 0.4% in premarket trading on Thursday to $402.50. The stock opened at $404.22 in the prior session. S&P 500 futures were down 0.4%, and Dow Jones Industrial Average futures were down 0.3%.
The cause was not anything Tesla did. It was Alphabet’s earnings report, released after Wednesday’s close.
Alphabet’s Google search business missed numbers, and the stock fell 10.8%. Search revenue still grew 12% from a year ago.
Why Analysts Are Split on Alphabet
Melius analyst Ben Reitzes took a cautious view. He said the slowdown may not be temporary and wrote that “we could finally see secular issues rear their head, with a second consecutive quarter of deceleration.”
Deutsche Bank’s Benjamin Black disagreed. “We are defending [Alphabet] stock,” he wrote, saying AI is driving the strongest search query growth in five years. He added that Alphabet is starting to scale advertising across these new experiences.
The selling spread to other AI names. SpaceX stock fell 1.7% on Thursday morning.
Tesla and SpaceX trade as a pair of sorts. Investors expect the two Elon Musk-led companies to merge in an all-stock deal. Under that scenario, SpaceX would pay a premium.
Caterpillar also took a hit, falling about 10%. The company has turned into an AI play because its power division is booming from data center construction.
Caterpillar beat third-quarter estimates, helped by tariff refunds. It did not raise guidance, and that was enough to add to the tech selling.
Where Tesla Stands Heading Into the Session
Tesla’s market value is about $1.60 trillion. The stock trades at a P/E ratio of 444.20 and has a beta of 1.92. Its 52-week range runs from $297.38 to $498.83.
The 50-day moving average is $367.47, and the 200-day is $386.26. That puts the stock above both lines.
Tesla reported third-quarter earnings on October 21. Earnings per share came in at $0.48, beating the $0.46 estimate. Revenue was $28.05 billion, in line with the $28.06 billion forecast and down 0.2% from a year ago.
Wall Street leans positive. MarketBeat lists a “Moderate Buy” rating with an average price target of $414.51. Of the analysts tracked, one has a Strong Buy, 27 have Buy ratings, 17 have Hold ratings and four have Sell ratings.
Jefferies and Morgan Stanley both upgraded the stock on Monday. Barclays also moved to Overweight with a $450 target, arguing Tesla’s upside goes beyond a SpaceX deal. It pointed to EVs, energy storage and Full Self-Driving subscriptions.
Not every headline was friendly. Free cash flow turned positive mainly because capital spending came in at $4.73 billion versus about $7.77 billion expected. Operating income fell 56% to $718 million.
In South Korea, 80 Tesla drivers reportedly face criminal referrals for unauthorized FSD use.
Amazon reports its quarterly numbers after Thursday’s market close. Tesla’s move through the rest of the session may hinge on how the AI trade reacts.
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