Tesla Reports Wednesday. Here Is What to Watch.
Tesla reports Q1 2026 earnings on April 22 after a delivery miss and energy storage drop. Alphabet follows April 29. What the numbers need to show.
Tesla reports Q1 2026 earnings after the close on Wednesday, April 22. Alphabet follows one week later on April 29. Together, these two reports will set the tone for the second half of earnings season. We already know the delivery numbers. The question now is whether margins, guidance, and the energy business can change the narrative.
Tesla: The Setup
The headline number is already public. Tesla delivered 358,023 vehicles in Q1, missing the consensus estimate of 365,645 by roughly 7,600 units. Year over year, deliveries grew 6.3% from 336,681, but sequentially they dropped 14.4% from Q4 2025’s 418,227.
More concerning: Tesla produced 408,386 vehicles but delivered only 358,023. That 50,363-unit gap between production and deliveries is the widest since the pandemic and signals either logistics delays or softening demand.
The Three Numbers That Matter
1. Automotive Gross Margin
Street consensus expects revenue of approximately $22.7 billion and EPS of $0.37. But the real tell is automotive gross margin excluding credits. In Q4 2025, Tesla posted 17.4% automotive gross margin. Anything below 17% would signal that price cuts and incentives are eroding the core business faster than cost reductions can offset.
In our view, margin is more important than the revenue beat/miss this quarter. Tesla can grow deliveries through price cuts, but if each vehicle contributes less margin, revenue growth becomes a treadmill.
| Metric | Q1 2025 | Q4 2025 | Q1 2026 Consensus |
|---|---|---|---|
| Deliveries | 336,681 | 418,227 | 365,645 (missed: 358,023) |
| Revenue | $19.34B | $25.71B | ~$22.7B |
| EPS | $0.27 | $0.71 | $0.37 |
| Auto gross margin (ex-credits) | 16.3% | 17.4% | ~17.0% |
| Energy storage (GWh) | 10.4 | 14.2 | 14.4 (actual: 8.8) |
2. Energy Storage Deployments
This is the number that blindsided analysts. Tesla deployed just 8.8 GWh of energy storage in Q1, a 38% sequential decline from 14.2 GWh in Q4 2025 and far below the 14.4 GWh consensus. The energy business had been Tesla’s growth bright spot, with Megapack demand exceeding supply throughout 2025. A sharp pullback raises questions about whether Q4’s record was pulled-forward demand or whether utility customers are pausing amid rate uncertainty.
Watch the earnings call for commentary on Megapack backlog and the Terafactory build-out timeline. If management confirms the Q1 drop was timing (lumpy utility project schedules) rather than demand, the stock could reclaim the pre-delivery selloff.
3. Robotaxi and FSD Revenue Recognition
Morningstar’s $400 fair value estimate explicitly values Tesla’s robotaxi and humanoid robot segments. At $400.62 per share as of April 17, the stock is trading roughly at fair value. That means any miss on the AI/autonomy narrative compresses the multiple, and any surprise acceleration supports it.
The market wants to hear two things: (1) a concrete timeline for supervised-to-unsupervised FSD transition in at least one market, and (2) revenue recognition from the FSD subscription and one-time purchase option. If Tesla can show FSD deferred revenue converting to recognized revenue at a meaningful rate, that changes the margin story entirely because software revenue carries 80%+ gross margins.
Alphabet: The Preview (April 29)
Alphabet reports the following Wednesday, April 29, after the close. The consensus expects revenue near $107 billion and EPS of approximately $2.61 to $2.76 depending on the survey.
The stock carries a consensus Strong Buy from 55 analysts with a mean price target of $378.
What Alphabet Needs to Show
Google Cloud growth. Cloud revenue grew 48% year over year to $17.7 billion in Q4 2025, powered by a $243 billion backlog. The market expects that growth rate to hold near 40%+ in Q1. Any deceleration below 35% would raise questions about whether the AI infrastructure spending cycle is peaking.
Search advertising resilience. Google Search generated $63 billion in Q4 2025, up 17% year over year. The bull case is that AI-enhanced search (Search Generative Experience) expands query volume faster than it cannibalizes ad inventory. The bear case is that AI Overviews reduce the number of clickable ad positions per query. Q1 results will provide the first full-quarter signal on this dynamic.
Capital expenditure trajectory. Alphabet guided to approximately $75 billion in 2025 capex for AI infrastructure. Investors want visibility on whether 2026 capex holds at that level or accelerates further. Higher capex with decelerating cloud revenue would compress free cash flow and pressure the multiple.
Cross-Asset Implications
Both reports transmit to the broader market through the same channel: AI capex expectations. Tesla’s Terafab investment and Alphabet’s data center buildout are both bets on hardware-intensive AI infrastructure. If both companies signal that the return on AI capex is materializing (Tesla through FSD revenue, Alphabet through Cloud growth), it validates the semiconductor supply chain (NVDA, AMD, AVGO) and reinforces the capital spending cycle.
If either pulls back on AI spending guidance, the transmission runs in reverse. Semiconductor demand expectations fall, and the entire AI infrastructure trade reprices.
We believe the Tesla call on Wednesday will be the first test. Alphabet the following week will be the confirmation or contradiction.
Scenario Analysis
| Scenario | Probability | Tesla Impact | Alphabet Impact | Market Signal |
|---|---|---|---|---|
| Margins hold, energy explained as timing, FSD progress | 35% | +5-8% | Positive read-through | AI capex cycle intact |
| Margin miss, energy weakness confirmed, no FSD catalyst | 30% | -8-12% | Neutral (separate report) | Demand concerns broaden |
| Revenue in-line, mixed signals, guidance unchanged | 35% | -2% to +2% flat | Consensus holds | Wait for Alphabet |
Related reading:
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- Bank Earnings Week: What the Numbers Tell Us
- What Is the VIX?
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