Key Points
Tesla (NASDAQ: TSLA) hit major sales milestones in the second quarter of 2026, when it reported $28.2 billion in revenue and surpassed $100 billion in trailing revenue for the first time ever. Despite that, the sentiment around Tesla is largely negative, and its share price is down 21% this year (as of Aug. 27).
I own Tesla stock, and I have no plans of selling. Although the brand has taken a hit, Tesla still excels in several areas, and it’s moving into new markets with exciting growth opportunities.
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Image source: Tesla.
Tesla remains a leading EV company
One of the reasons I first invested in Tesla was the popularity of its cars — I was seeing them everywhere. In 2024, and even more so in 2025, Tesla sales fell, but they have bounced back this year. It reported 480,126 vehicle deliveries in Q2 2026, a 25% year-over-year increase. Automotive revenue totaled $20.5 billion.
Tesla is the second-largest EV manufacturer after BYD. It’s essentially a two-horse race at the top of the EV market, and while BYD is strong competition for Tesla internationally, it doesn’t sell consumer EVs in the U.S. due to a 100% tariff on Chinese EVs.
I’ve also been impressed with the Tesla Supercharger network. It provides about 51% of all DC Fast EV charging ports in the U.S., according to recent research by The Motley Fool. DC Fast chargers are significantly faster than standard chargers, capable of charging an empty EV battery to 80% in 20 to 40 minutes. Tesla has done such an effective job of building out its network that just about every other major automaker has switched to Tesla’s North American Charging Standard (NACS), so that their EVs can use Tesla’s Supercharger ports without an adapter.
Tesla reports Supercharger revenue under services and other revenue. This jumped 50% year over year to $4.6 billion in Q2 2026.
More than just an automaker
Although automotive sales remain Tesla’s biggest source of revenue, it also made $3.1 billion from energy generation and storage in Q2, when it deployed a record 13.5 GWh of storage. In addition, Tesla is investing heavily in AI and robotics. It expects to start production of Optimus humanoid robots at its Fremont, California, factory and at its Gigafactory in Austin, Texas, soon.
Tesla more than doubled its on-site compute capacity in Texas in the first half of 2026 to over 205 megawatts, with plans to reach nearly 400 megawatts by the end of the year. While expensive, the company’s AI infrastructure is instrumental in developing its Optimus robots, full self-driving (FSD) feature, and robotaxi fleet.
I realize that mentioning Tesla’s pivot into robotics and autonomous vehicle technology is bound to raise skepticism. CEO Elon Musk has a history of making ambitious predictions that don’t always work out. But Tesla is making progress, even if it isn’t coming as quickly as Musk estimated. Over 55% of Tesla’s deliveries in North America now include an FSD subscription, and robotaxi fleets are operating in several major metro areas, including Austin, Dallas, Houston, Miami, and Orlando.
The upshot for Tesla is that these are all potentially higher-margin businesses than selling cars. Optimus robots will likely include ongoing software subscription costs and maintenance fees. FSD software subscriptions bring in recurring revenue at minimal cost, and the robotaxi service could do the same.
The bear case
AI and robotics aren’t cheap, so Tesla’s expansion into these areas has required it to ramp up capital expenditures considerably. It’s projecting capex of over $25 billion for the full year, and its free cash flow fell to negative $1.1 billion in Q2 2026.
Operating expenses also rose 47% year over year to $4.4 billion, as Tesla invested more in AI and research and development (R&D). Consequently, Tesla’s earnings per share (EPS) for its most recent quarter fell short of expectations. It reported an adjusted EPS of $0.33, compared with expectations of $0.51.
Even though Tesla stock has fallen this year, it’s still quite expensive. It trades at 329 times trailing earnings, which is extremely high, whether you compare it to automakers or tech stocks.
Should you sell Tesla?
I’m continuing to hold Tesla, and I don’t think now is a good time to sell. Tesla is in the early stages of its Robotaxi rollout and Optimus production, both of which could lead to significant earnings growth. Dumping the stock would mean giving up on it before these potential growth catalysts play out.
Tesla has gotten plenty of bad press recently, and Elon Musk is a controversial figure, to say the least. But I always feel it’s best to focus on the business and where it could be in 10 years’ time. If Tesla’s pivot to AI and robotics doesn’t lead to noticeable revenue growth, I may reassess my position. For now, I’m still bullish on it as a long-term investment.
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Lyle Daly has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.
