Tesla Stock Suffered Its Worst Week Since 2022, Falling 18% as Investors Balked at Elon Musk's Robotaxi and AI Spending Plans

Tesla stock crashed 18% last week—its worst weekly performance since 2022—as investors recoiled from the electric vehicle maker's Q2 earnings report and capital allocation strategy. The sell-off followed results that showed operating margins compressed to 1.4% and negative free cash flow of $1.1 billion, despite trailing-12-month revenue topping $100 billion.

The market's concern centers on Tesla's unprecedented spending plans: $25 billion in capex budgeted for this year, with authorization to borrow up to $30 billion. CEO Elon Musk is redirecting capital toward robotaxi development and the Optimus humanoid robot program, neither of which has reached commercialization. Investors are questioning whether these moonshot projects justify the margin compression and cash burn visible in current financials.

The magnitude of the weekly decline signals a sharp reassessment of Tesla's near-term risk profile, particularly as the company prioritizes experimental ventures over traditional automotive profitability metrics that have historically supported the valuation.