Tesla Loses a Quarter: Musk's AI Bill Landed Hard

Tesla shares collapsed by more than 25 percent in New York trading, marking the electric vehicle maker's worst single session in years, after the company reported weak quarterly profits and disclosed sharply higher spending on artificial intelligence infrastructure and robotics, according to The Guardian.

The numbers landed poorly on Wall Street precisely because investors had already been pricing in a recovery that the earnings failed to deliver. Revenue disappointed. Margins compressed. And the forward guidance offered little reassurance that the AI and robotics pivot — the strategy Elon Musk has staked the company's next chapter on — will produce returns on any timeline the market finds acceptable.

What makes the sell-off significant is its scale. Losing a quarter of market capitalisation in a single session is not a correction. It is a verdict. Institutional investors, who had extended considerable patience through years of production volatility and executive distraction, appear to have decided that patience has a price — and this quarter exceeded it.

The drop also ripples outward. Tesla remains a bellwether for broader EV sector sentiment, and a collapse of this magnitude will weigh on competitors, suppliers, and the battery materials markets that underpin the entire transition economy. In Frankfurt and Singapore, the aftershocks were already visible in after-hours trading.

Musk has not commented publicly on the results. The next shareholder call is expected to face pointed questions about the timeline and cost structure of the AI build-out.