
Tesla Q1 Earnings Beat Expectations But Musk's $25B AI Spending Warning Sparks Stock Drop
Tesla's first quarter earnings beat Wall Street expectations with profits up 16% year-over-year, briefly sending the stock surging before CEO Elon Musk's cautionary note about $25 billion in planned spending on AI and chips erased gains. The company posted its second-worst net profits and vehicle deliveries out of the last 12 quarters, despite exceeding analyst forecasts, with regulatory credit revenue dropping due to Trump administration policy shifts. Musk emphasized the company's long-term focus on AI, humanoid robot Optimus and fully autonomous vehicles, with Optimus entering production this summer.