Tesla NASDAQ:TSLA short sellers scored one of their biggest wins of the year after the electric vehicle maker's disappointing earnings triggered its sharpest one-day stock decline in more than 12 months.
Tesla shares tumbled 14.5% after reporting weaker-than-expected quarterly profit, reigniting concerns about how quickly its heavy investments in artificial intelligence and robotics will translate into meaningful financial returns. According to S3 Partners, the selloff generated about $4.3 billion in paper gains for investors betting against the stock in a single session.
Tesla designs electric vehicles, battery systems and AI technologies, while increasingly positioning itself as a robotics and autonomous driving company. Even so, investors remain focused on whether those long-term initiatives can offset slowing growth in its core automotive business.
Tesla remains the most shorted stock among the Magnificent Seven, with roughly 3% of its shares sold short. After this year's decline, the stock is down nearly 29% in 2026, leaving short sellers sitting on an estimated $9.08 billion in mark-to-market gains.