Tesla beats profit forecasts as AI spending weighs on investors

Tesla reported better-than-expected third-quarter adjusted earnings on Wednesday, driven by a rebound in vehicle deliveries and growth in energy storage, while investors focused on spending for artificial intelligence, robotics, and self-driving technology. Revenue reached $28.05 billion, slightly above analyst forecasts, and adjusted earnings per share hit 48 cents versus the expected 43 cents. Shares rose about 2% in extended trading. Tesla delivered 486,532 vehicles in the quarter, surpassing Wall Street expectations of roughly 461,100, though deliveries fell about 2% year-over-year. Capital expenditures totaled $4.73 billion, below expectations, while free cash flow swung to a positive $1.53 billion against forecasts of an outflow. The company faces rising competition from cheaper electric vehicle rivals and has responded with discounted models. Tesla’s energy storage business is becoming a growing profit driver, benefiting from demand for large-scale batteries from renewable energy players and data centers, though tariffs are expected to impact it more than vehicles. Investors are also weighing a potential merger with SpaceX, which Musk said is under review but not guaranteed. Tesla shares are down about 14% this year, yet the company remains the world’s most valuable automaker at roughly $1.4 trillion.