Gary Black Says Tesla's 14% Post-Earnings Selloff Shows Investors Took Management's 'Caution About Not Scaling' Autonomy to Heart

Tesla Inc (NASDAQ:TSLA) investor Gary Black said Thursday the company’s post-earnings selloff reflected investors reassessing expectations for its autonomous driving ambitions after management struck a cautious tone on scaling unsupervised self-driving.

Market Was Too Optimistic On Autonomy

Black, managing partner at The Future Fund LLC, said on X that Tesla’s 14.5% decline marked its worst trading day since March 2025, adding that investors “took to heart management’s caution about not scaling up” until those vehicles demonstrated it was safe to do so.

“We have long argued that at a 180x forward P/E the market was way too aggressive in assuming TSLA gets to the finish line first on unsupervised autonomy and that other competitors can’t match its ability to scale,” Black said.

Earlier this week, Black criticized Tesla management for continuing to “overpromise and underdeliver,” saying CEO Elon Musk needed to “shore up credibility” around the company’s autonomous driving ambitions.

$TSLA stock (-14.5%) had its worst day since March 2025 (and before that Sept 2020) as investors took to heart management’s caution about not scaling up unsupervised autonomy until the ~40 test vehicles can demonstrate that it’s safe to do so. We have long argued that at a 180x… pic.twitter.com/QTYriRCgdC

— Gary Black (@garyblack00) July 23, 2026

Earnings Miss Wall Street Estimates

During the second-quarter earnings call, Musk said Tesla’s Robotaxi rollout would be constrained by safety, and added that the company was “going as fast as humanly possible” while ensuring it did not “harm anyone at all.”

CFO Vaibhav Taneja said Tesla would continue addressing operational challenges with a “smaller fleet in a controlled manner” before significantly expanding deployments.

Analysts Trim Price Target

The company reported second-quarter adjusted earnings of 33 cents per share, missing analysts’ estimates of 50 cents, according to Benzinga Pro. Revenue came in at $28.23 billion, topping the consensus estimate of $25.70 billion.

Following the results, UBS maintained its Neutral rating and cut its price target to $385 from $442. JPMorgan kept its Neutral rating and lowered its target to $445 from $475, while Morgan Stanley maintained its Equal-Weight rating and reduced its price target to $400 from $417.

Tesla shares are down 27.02% year-to-date and have declined 3.87% over the past 12 months.

Price Action: The stock ended Thursday’s session 14.52% lower at $319.69, before recovering 1.35% in after-hours trading.

Benzinga edge rankings indicate TSLA has a Momentum score in the 33rd percentile and a Growth score in the 88th percentile.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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