Wall Street is feeling anxious ahead of Tesla's Q4 earnings as deliveries sag and AI uncertainty builds

• Tesla is slated to report its earnings for the fourth quarter on Wednesday.
• The results are the final update in what was a a highly volatile year for Tesla stock.
• Analysts are concerned about weak EV demand and challenges to its AI and robotics projects.

All eyes will be on Tesla on Wednesday.

Elon Musk's carmaker is due to report fourth-quarter earnings, and investors are eager to see how the company performed as it wrapped up a particularly volatile year.

Headwinds like declining car sales, concerns about tariffs, and Musk's politics sent shares of the company on a roller coaster ride in 2025, with the stock plunging more than 50% from its December peak through April of last year.

Then, shares rallied more than 100%, driven by catalysts like trade deals and Musk announcing he would step back from the US government.

Wall Street, though, is still wary of the challenges that lie ahead for the car company, particularly as deliveries continue to decline. The firm recently reported a 16% year-over-year drop in deliveries for the fourth quarter. Forecasters are also eyeing potential challenges Tesla could face as it doubles down on its AI and robotics projects.

Wall Street expects revenue of $25.1 billion and earnings per share of $0.34 for the quarter.

Here's what analysts are saying ahead of the company's results.

JPMorgan: Cutting estimates after deliveries drop

Tesla's stock price looks "increasingly divorced" from the business's "rapidly declining earnings outlook," analysts at JPMorgan wrote in a recent client note.

Analysts said they had lowered their earnings-per-share estimate for Tesla to $0.43 from $0.48 after the carmaker missed its fourth-quarter delivery target.

"The -16% y/y decline in 4Q25 deliveries is the worst ever for Tesla, surpassing the prior record declines of -13% y/y," a team led by Ryan Brinkman wrote, pointing to how the results have contrasted against the firm's goal of seeing a "return to growth."

The bank added that it continued to see "large downside potential" for the stock.

Analysts reiterated their "underweight" rating on Tesla and $150 price target, implying 65% downside from the stock's current levels.

Wells Fargo: 'Fundamentals look weak'

Wells Fargo said it remains pessimistic about Tesla's business fundamentals. Analysts wrote they believe the company will continue to see "moderating delivery growth" this year, pointing to lower demand for Teslas and diminishing returns on the company's price cuts.

The stock also looks priced as if "robotaxi domination is inevitable,' strategists wrote, referring to the premium investors are placing on Tesla's full self-driving technology and autonomous car fleet.

But the company still faces challenges on the AI and robotics front, they added, speculating that, unless Tesla were to pivot its strategy, the company risks having a "data disadvantage" and falling behind the competition.

"2026 Fundamentals look weak, leaving no support if Robotaxi/Optimus disappoint," analysts wrote in a client note.

The bank reiterated its "underweight" rating on the stock but lifted its price target to $130 a share, citing updated growth estimates for Tesla's car business. The price target implies 70% downside from Tesla's current levels.

UBS: Return from AI projects could be 'further out'

Tesla stock looks like it's already largely priced in the bull case scenario, which relies on the success of the company's robotaxi business and Optimus, Tesla's humanoid robot.

"So in our view, given a declining valuation for TSLA's EV business, the market is already assigning a higher and higher value to the AI ventures. While the TAM for these ventures may be large, they could also be further out," analysts wrote of the expected return on the company's AI endeavours.

The bank acknowledged there were a handful of positive catalysts that could help Tesla's business this year, such as updates to its full self-driving technology or the company rolling out robotaxis in other US cities.

"While we are more positive than not on TSLA tech and progress, and believe there could be a strong milestone catalyst path, we do believe that many of these ventures/developments are already (more than) baked into the stock price," analysts added.

UBS has a "sell" rating on the stock and a $247 price target, implying 43% downside from current levels.

Oppenheimer: Challenges to Robotaxi and Optimus

Oppenheimer highlighted two challenges Tesla is facing: demand for electric vehicles remains "soft," and the company's progress on AI has been "slower than anticipated," the firm wrote in a recent note.

The firm pointed to continued progress Tesla would need to make before beginning the production of Optimus. It also pointed to waning demand for Teslas, with sales declining for two years in a row.

"We see downside risk to 2026 consensus as we continue to anticipate delays in Robotaxi performance and Optimus ramp in context of a challenging EV demand environment for TSLA," the firm wrote.

Analysts issued a "perform" rating on Tesla and trimmed its fourth-quarter revenue estimates from $24.08 billion to $23.7 billion. It also lowered revenue estimates for the 2026 fiscal year to $97.2 billion and trimmed earnings-per-share estimates to $2.06.

Cantor: Expecting a handful of AI catalysts

Tesla's annual global sales have been lackluster, but most of the recent decline stemmed from the end of the federal EV tax credit in September. That effect could be mitigated if the company were to roll out more affordable models and offer "increased autonomy features," analysts at Cantor said.

They also highlighted potential catalysts that could boost Tesla stock down the line, like the company rolling out full self-driving in China and Europe, expanding its robotaxi presence across the US, and launching Optimus commercially in 2027.

Cantor reiterated its "overweight" rating on Tesla and set a $510 price target, implying 17% upside from current levels.

Wedbush Securities: Growth potential from AI

Wedbush, which has long been bullish on Tesla, remains optimistic about its AI and robotics projects.

The research firm said it believed the company could hit a $2 trillion valuation in the next year, or, in the best-case scenario, a $3 trillion valuation as the company begins "full scale volume production" of some of its autonomous and robotics products.

The firm pointed to the belief that Tesla could roll out its Cybercab and Optimus bot in the next few years, as well as the expectation for Tesla to expand its robotaxi fleet across the US.

"We believe Tesla will own ~70% of the global autonomous market over the next decade as no other company can match the scale and scope of Tesla coupled with its broadening AI footprint," a team led by Dan Ives wrote in a note.

Wedbush reiterated its "outperform" rating and issued a $600 price target on Tesla, implying 38% upside from current levels.