Tesla Has Its Worst Day of the Year: It Lost Nearly $200 Billion in Market Capitalization

Tesla shares fell more than 15% on Thursday, marking their sharpest one-day drop since June 2025. The automaker’s stock was the worst performer in the S&P 500 index. The company’s market value fell by approximately $195 billion, which exceeds the market capitalization of any other global automaker, MarketWatch reports, citing data from Dow Jones Market Data.

Investors reacted similarly to the release of Tesla’s quarterly report the day before—in which the automaker reported adjusted earnings significantly below Wall Street’s expectations. The company’s capital expenditures in the second quarter rose 142% compared to the same period last year, totaling $5.8 billion. During a conference call following the release of the financial results, Tesla CEO Elon Musk stated that he had directed the company to continue increasing spending: “We should be directing funds toward capital investments as quickly as we possibly can—as fast as possible without being excessively wasteful. We are not aiming for maximum capital efficiency, as that would slow down our pace of work,” Business Insider quotes Musk as saying. The company confirmed that it will allocate at least $25 billion to capital expenditures in 2026, with the majority of spending occurring in the second half of the year, Business Insider reports.

Oppenheimer called the automaker’s quarterly results “underwhelming” and lowered its earnings forecast for the company, citing significant risks to strategy execution and a growing need for capital. Investors still lack clarity on when Tesla will begin to see returns on its multibillion-dollar investments, noted Morgan Stanley analyst Andrew Percoco. The market’s tolerance for further growth in capital expenditures could quickly run out, he added. The investment bank lowered its target price for Tesla shares from $417 to $400, which implies an increase of nearly 7% from the previous close.

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