Tesla, a leader in electric vehicles, will announce its third-quarter earnings for 2025 on October 22nd. Since its IPO in 2010, Tesla has had impressive stock performance but is currently facing challenges like new tariffs, a slowing EV market, and political issues. Still, Tesla’s shares have risen by 93% in the past six months. Analysts expect modest sales growth and a decline in earnings per share (EPS) growth until 2026. Wall Street is predicting Q3 revenue to hit $26.45 billion, a 5.05% rise, with an EPS of $0.53, which is down 26.39%. Tesla has fallen short of earnings expectations, missing them in six of the last ten quarters, averaging a 3.65% miss over the past four quarters.

Stock Movement Predictions

According to the options market, Tesla’s stock could move by +/- $37.48 or about 8.53%. Historically, after earnings reports, the stock has moved an average of +/- 10.53%. If earnings are strong, the stock could reach its previous high of $488. However, if expectations aren’t met, it might drop to around $400. Tesla is focused on stabilizing its traditional EV business, growing its energy sector, and on timelines for new technologies like Full Self-Driving (FSD), Robotaxis, and Optimus. With earnings just two days away on October 22nd, we have a situation where strong momentum meets weak expectations. The stock is up 93% over six months and forming a bullish chart pattern, even as Wall Street predicts a 26% drop in EPS. This scenario presents an opportunity, as the market seems uncertain about Tesla’s next big move. The options market is anticipating an 8.53% swing in stock price after the announcement, a significant movement. However, looking at the last eight earnings reports, the average movement has been larger, at 10.53%. This suggests the current options pricing may underestimate potential volatility, making strategies that benefit from a big price swing appealing.

Future Growth or Risks

On one side, there are valid concerns about Tesla’s core auto business, supported by recent data. Global EV sales growth has slowed to just 15% year-over-year in the third quarter of 2025, as reported by the International Energy Agency. Competitors like BYD are also gaining market share in important areas. If earnings disappoint, the stock could drop to the $400 support level, aligning with a recent price gap. On the flip side, the conversation could quickly turn to future growth, especially with the AI boom increasing demand for Tesla’s energy storage solutions. The Federal Reserve has lowered rates twice in 2025 to 4.5%, which could ease vehicle financing costs and boost future projections. If Elon Musk presents a solid timeline for projects like Robotaxi, investors might overlook a weak quarter and push the stock closer to its all-time high of $488. Given the historical 50/50 chance of the stock moving either up or down after earnings, choosing a direction is risky. We remember the 12% decline after missing estimates in Q1 2024, showing that the market reacts strongly to disappointment. Therefore, a wise strategy could be to trade the volatility itself, possibly by purchasing both a call and a put option to take advantage of a move larger than the currently anticipated 8.53%. Create your live VT Markets account and start trading now.

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