Tesla has stumbled in its first annual decline in revenue, with the electric car giant reporting a 3% drop in quarterly earnings to $24.9 billion. The news comes as part of an already busy day for corporate earnings announcements, which also saw results from Microsoft, Meta, and Samsung Electronics.
For all of 2025, Tesla's revenue fell to $94.8 billion, down from $97.7 billion the previous year. Net profit plummeted by 61% to $840 million in the quarter, taking annual profit to $3.8 billion - a far cry from the $7.1 billion seen in 2024.
The decline is part of a broader pivot for Tesla away from its core auto market. The company has agreed to invest $2 billion in Elon Musk's artificial intelligence start-up xAI, which develops the Grok chatbot at the center of controversy over AI ethics and safety. According to Tesla, the investment and related framework agreement aim to enhance the company's ability to develop and deploy AI products and services into the physical world.
Despite this shift, investors are holding on to hope that Tesla will see a resurgence in growth. Shares rose by 2.2 percent in after-hours trading following the earnings report.
The news has been overshadowed by strong performances from other tech giants, including Microsoft, Meta, and Samsung Electronics. Microsoft reported a 60% surge in profit to $38.5 billion on revenue of $81.3 billion. However, despite this success, fears of an AI investment bubble have raised concerns about the market's sustainability.
For Tesla, the decline marks a significant shift in its business model as it seeks to expand into new areas. While the news is unlikely to be a cause for concern among investors just yet, it remains to be seen how the company will navigate this transition and whether its AI-focused pivot will pay dividends in the long run.
For all of 2025, Tesla's revenue fell to $94.8 billion, down from $97.7 billion the previous year. Net profit plummeted by 61% to $840 million in the quarter, taking annual profit to $3.8 billion - a far cry from the $7.1 billion seen in 2024.
The decline is part of a broader pivot for Tesla away from its core auto market. The company has agreed to invest $2 billion in Elon Musk's artificial intelligence start-up xAI, which develops the Grok chatbot at the center of controversy over AI ethics and safety. According to Tesla, the investment and related framework agreement aim to enhance the company's ability to develop and deploy AI products and services into the physical world.
Despite this shift, investors are holding on to hope that Tesla will see a resurgence in growth. Shares rose by 2.2 percent in after-hours trading following the earnings report.
The news has been overshadowed by strong performances from other tech giants, including Microsoft, Meta, and Samsung Electronics. Microsoft reported a 60% surge in profit to $38.5 billion on revenue of $81.3 billion. However, despite this success, fears of an AI investment bubble have raised concerns about the market's sustainability.
For Tesla, the decline marks a significant shift in its business model as it seeks to expand into new areas. While the news is unlikely to be a cause for concern among investors just yet, it remains to be seen how the company will navigate this transition and whether its AI-focused pivot will pay dividends in the long run.
i mean i knew they were shifting focus to ai but a decline like that is kinda scary 
still think musk knows what he's doing tho 
maybe this ai thing will pay off in the long run, but for now it's all about the bottom line 
got my fingers crossed for a rebound soon 
. I mean, 3% decline is like, a small blip on the radar, right? It just shows Elon Musk and the gang are smart enough to diversify their portfolio. This AI thing is gonna be huge, mark my words 
. All those other tech giants reporting huge profits just shows they're playing it safe, whereas Tesla's bold move into AI is a game-changer 
. The market's gonna crash and burn if everyone follows the crowd...
either way, i'm a bit concerned about this AI investment bubble... seems like every tech giant is jumping on the bandwagon now 
. $2 billion investment is a drop in the bucket compared to their overall revenue, and it's all about diversifying their portfolio. Plus, Elon Musk has been doing his thing for years, so I trust him to make smart decisions 
. It's not like they're abandoning their core business – that's just part of the plan to expand into new areas 
. We'll see how it plays out, but for now, I'm staying loyal to the platform 
. Mark my words, this pivot will be a disaster 
. I mean, who needs AI when you can just make electric cars that actually work? 
Tesla's problem was never about innovation, it was always about production and reliability 
. Now they're throwing good money after bad 
, don't get too excited 
.
What does this say about the market? Is there an AI investment bubble waiting to pop? 
. The company has been expanding into new areas, such as clean energy solutions and sustainable products 
. If they can find a way to balance their investments in AI with these other initiatives, I think they'll be back on track in no time 
. not saying it's a bad move, but it's definitely a weird pivot 
what's going on with elon musk and his ai start-up xAI? investing 2 billion dollars in some chatbot company? that seems so weird 
, you know? The Grok chatbot thing is just one example of how they're trying to get into AI, but that's not their bread and butter 
. And the investment in xAI is a big chunk of change - can they really make it pay off? 
.
- Microsoft and Samsung are killing the game right now 
. Maybe Tesla needs to focus on what they're already good at: making cool cars 
, rather than trying to be everything and nothing 
. I'm keeping an eye on how this plays out, 'cause I think Tesla's got some innovative stuff cookin' 
. Maybe their AI pivot will be the game-changer they need to stay ahead of the curve