Tesla shares drop 5% after spending cut raises AI investment doubts

Tesla shares fell 5% in premarket trading Thursday after the company lowered its 2026 capital spending forecast to about $20 billion from over $25 billion, raising doubts about the pace of investment in Elon Musk's AI, robotics, and autonomous-driving projects. The reduced forecast follows third-quarter spending far below expectations on AI and robotics, producing surprise positive free cash flow. J.P. Morgan analysts noted the delay aids near-term cash burn but signals postponed investments crucial for long-term opportunities, with spending expected to ramp up in 2027-2028. Tesla's stock is down about 14% this year, contrasting with the Nasdaq's 15% gain, and trades at 188 times forward earnings versus roughly 6 for Ford and 5 for GM. Analysts warn of a potential limbo period as investors await news on a possible SpaceX combination facing regulatory hurdles.