-
Tesla sales and deliveries are expected to drop in the fourth quarter.
-
On top of that, its operating margins also shrank this year.
-
But its self-driving software could be a paradigm shift for the stock.
-
These 10 stocks could mint the next wave of millionaires ›
We’ve seen some amazing returns from artificial intelligence stocks this year — popular names such as Alphabet, Broadcom, Palantir Technologies, and Advanced Micro Devices are all up more than 50% on the year.
However, there’s one name that’s just been treading water in 2025, but could be in line for a massive upswing in 2026. And that’s the leading electric vehicle company that has its sights set on revolutionizing travel and bringing autonomous driving mainstream within the next 12 months.
Let’s take a closer look at Tesla (NASDAQ: TSLA) stock.
On the surface, you wouldn’t think that Tesla is headed for greatness. As the world’s largest maker of electric vehicles, it’s coming off a third quarter in which it reported strong revenue, thanks to the $7,500 expiring tax credit for EVs. In short, customers rushed to get their orders in before the credit expired at the end of September.
Tesla’s revenue was $28.09 billion, up from $25.18 billion a year ago, and it set company records for deliveries with 497,099 vehicles — 481,166 of them being their popular Model 3 and Model Y.
However, the company’s net income fell from $2.71 billion in the third quarter of 2024 to $1.62 billion in the current quarter. And most telling was the massive drop in operating margin, from 10.8% a year ago to just 5.8%.
Things for the fourth quarter don’t look well, either. According to the European Automobile Manufacturers Association, Tesla’s October sales in Europe declined by 48.5% compared to the same period last year. And Tesla sales fell 35.8% in China last month, marking a three-year low. The company’s U.S. sales dropped 24% in October, according to research firm Motor Intelligence.
Some loss is to be expected, although these numbers are hard to stomach. Tesla has become less popular in Europe thanks to some blowback from CEO Elon Musk’s endorsement of Germany’s far-right AfD party last spring, and China sales had already been slipping as Chinese EVs take more market share. In the U.S., Tesla is surely seeing a drop because buyers accelerated their purchases to take advantage of the now-expired tax credit.
But nobody thinks that Q4 deliveries will be a pleasant surprise. So, what’s the potential catalyst for Tesla stock in 2026?
About the Author
