\Tesla shares tumbled 12 per cent on Wednesday, evaporating almost $100 billion in stock market value after CEO Elon Musk's talk of humanoid robots and driverless taxis failed to comfort investors worried about the electric car maker's shrinking profit margins, reports Reuters.
Tesla posted its lowest quarterly profit margin in five years late on Tuesday, with earnings per share missing estimates for the fourth consecutive quarter.
It was the biggest one-day percentage drop in Tesla's stock since 2020, and it left Tesla's market capitalization at just under $700 billion, down from over $1 trillion in 2021.
Still the world's most valuable car maker, Tesla's valuation relies on investor expectations of big future profits driven by yet-to-launch products such as its promised robotaxis and robots.
"All of Musk's enthusiasm on the call, outside of (energy) storage, were for products that don't exist," said TD Cowen's Jeff Osborne.
Tesla's weak results, along with a report from Alphabet (GOOGL.O), opens new tab in which it flagged higher capital expenses, amounted to a poor start to second-quarter reports for Wall Street's most valuable companies.
Google parent Alphabet's stock fell almost 5 per cent, and the losses in its shares and Tesla's sent Wall Street into a deep sell-off as investors worried about pricey valuations.
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