Tesla is still a buy, this analyst says

Roth Capital Partners analyst Craig Irwin says Tesla’s (Tesla Stock Quote, Chart, News, Analysts, Financials NASDAQ:TSLA) Q2 revenue beat showed healthy demand, while spending on Optimus and Robotaxi weighed on earnings.

In a July 23 update, Irwin maintained his “Buy” rating and $505.00 target on Tesla.

Tesla reported Q2 revenue of US$28.2-billion and adjusted EPS of 33 cents, compared with Irwin’s estimates of US$24.9-billion and 62 cents. Consensus was US$26.4-billion and 53 cents.

Irwin said EPS came in below expectations because of one-time items and higher spending on Optimus and Robotaxi.

Non-GAAP automotive gross margin was 16.3%, below Irwin’s 19.7% forecast and consensus at 18.5%. Regulatory credits were US$146-million, the lowest level in seven years.

Tesla said it exited Q2 with its largest automotive backlog since 2023, with healthy demand across the Americas, Asia-Pacific and Europe, the Middle East and Africa.

Irwin said Full Self-Driving attachment rates are increasing, with 55% of new North American deliveries including FSD subscriptions. Tesla also received FSD approvals in Lithuania, Estonia, Denmark and Belgium after approval in the Netherlands.

Robotaxi launched unsupervised rides in Miami, Orlando and Tampa in July, bringing the service to six markets. Irwin said Tesla’s reported 380,000 Robotaxi miles without drivers and no material crash incidents was an important data point.

Irwin said Optimus development is tied to Tesla’s planned TerraFab, with the location announcement still pending. He expects TerraFab to require about US$30-billion of capital spending over the next two years for 100,000 monthly wafer starts.

Management maintained its 2026 outlook, targeting accelerating growth in the second half as new capacity comes online. Tesla also said it is increasingly prioritizing multi-year AI compute, battery materials and semi fab buildouts, with 2026 capital spending expected to exceed US$25-billion.

Irwin said Tesla remains a mega-cap company that often trades like an emerging growth stock, with catalysts playing a major role in valuation.

“We see several positive catalysts ahead, and we would be buyers on weakness,” Irwin said.

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