Tesla stock jumps ahead of earnings: will the climb continue after?

Shares of Tesla rose 1.19% to $391.90 on Wednesday, tracking gains in broader US equity markets as investors positioned ahead of the company's first-quarter earnings report.

The rally followed a broader upswing in equities after US President Donald Trump extended a ceasefire with Iran, easing geopolitical concerns and lifting sentiment.

The S&P 500 advanced 0.7%, while the Nasdaq Composite gained 0.8%. The Dow Jones Industrial Average climbed 385 points, or 0.8%.

Trump said the extension of the two-week ceasefire was warranted due to Tehran's "seriously fractured" government, reinforcing hopes for continued de-escalation.

Earnings expectations signal growth

Tesla is set to report its first-quarter results after the bell, with Wall Street expecting earnings per share of 36 cents on revenue of $22,3 billion (approx. R 381,8 billion).

In the same period a year earlier, the company reported earnings of 27 cents per share on revenue of $19,5 billion (approx. R 333,8 billion).

The anticipated increase reflects higher vehicle deliveries, which rose to approximately 358,000 units in the first quarter of 2026 from about 337,000 a year earlier.

Analysts expect adjusted profits to rise nearly 30% year-on-year, alongside a roughly 15% increase in revenue, marking a recovery from the fourth quarter when earnings fell more than 30% and revenue declined about 3%.

AI strategy drives valuation

Despite the expected improvement in financial performance, investor focus remains firmly on Tesla's long-term ambitions in artificial intelligence and robotics.

The company's push into autonomous driving and humanoid robotics has become the primary driver of its valuation, overshadowing its core automotive business.

These expectations previously helped propel the stock to a record high in December, but ongoing questions around execution have contributed to a 21% decline since then, making Tesla the weakest performer among the "Magnificent Seven" technology stocks over that period.

Analyst views diverge sharply

Analyst sentiment ahead of the results remains deeply divided.

GLJ Research reiterated a Sell rating with a $24.86 price target, projecting weaker-than-expected financial performance.

The firm estimates revenue of $20,4 billion (approx. R 350 billion), below consensus expectations, and forecasts gross margins of 16.1%, compared with the Street's 17.7%.

GLJ also expects non-GAAP earnings per share of $0.29, below the consensus estimate of $0.35, and projects negative free cash flow of $2,5 billion (approx. R 43,1 billion).

It further anticipates a GAAP operating loss of $213 million (approx. R 3,6 billion), in contrast to consensus expectations for positive operating income.

For full-year 2026, the firm forecasts revenue of $83,4 billion (approx. R 1,4 trillion), significantly below broader market expectations.

In contrast, Cantor Fitzgerald maintained an Overweight rating with a $510 price target, citing growth potential in Tesla's autonomous driving capabilities.

The firm said it expects Tesla's robotaxi services to expand across additional European cities this year, supporting market share gains.

Given the scale of retail participation in Tesla stock, investors globally will be closely tracking its moves on their online investment apps ahead of the company's earnings.

Robotaxi expansion signals progress

Tesla has continued to advance its autonomous driving initiatives in the United States.

Over the weekend, the company expanded its robotaxi operations to Houston and Dallas, marking its first geographic expansion since launching in Austin and San Francisco.

According to Morgan Stanley, the rollout represents a meaningful shift, with vehicles operating without in-car human safety monitors—unlike earlier deployments.

The firm maintained an Equalweight rating and a $415 price target, noting that the expansion demonstrates tangible progress at a time when investor scepticism around the robotaxi timeline had been increasing.