Tesla shares rise as profits beat estimates despite AI spending

Tesla reported third-quarter adjusted earnings that beat analyst expectations on Wednesday, with shares rising about 2% in after-hours trading. Revenue reached $28.05 billion, slightly above the $27.88 billion consensus estimate. Vehicle deliveries of 486,532 units exceeded Wall Street forecasts of roughly 461,100, though they fell about 2% year-over-year. Energy storage growth also supported results, while capital expenditures of $4.73 billion came in well below the expected $7.5 billion, helping free cash flow reach $1.53 billion against predictions of an outflow. Tesla faces intensifying competition in its core auto business and has warned that current tariffs will impact its energy segment more than its vehicle operations. The company is also exploring a potential merger with SpaceX, which would require shareholder approval, while expanding its autonomous driving services in multiple U.S. cities.