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As Q3 earnings continues, tech giants Tesla and IBM will report their earnings on Wednesday after the closing bell.
Tesla’s stock price is trading around December 2024 highs while IBM is shifting to AI and cloud services.
Market Expectations for Earnings and Revenues
- Tesla is expected to report EPS of $0.54, a 25% decline YoY, while revenue is expected at $26.22 billion, a 4.13% increase YoY, driven by record deliveries but pressured by softer margins and pricing.
- IBM is expected to report EPS of $2.44, a 6% increase YoY, while revenue is expected at $16 billion, a 6% increase YoY, driven by growth in hybrid-cloud and AI software, but remains pressured by slower infrastructure and enterprise spending.
Analysts remain optimistic on both stocks, with Tesla’s price targets standing at $509 from TD Cowen and $600 from Wedbush, driven by AI innovation and autonomous growth. ⁽¹⁾
Meanwhile, IBM’s outlook remains steady, with Wedbush setting its target at $325 while Bank of America’s target is at $310, highlighting strong confidence in IBM’s AI-driven hybrid cloud expansion and steady cashflows. ⁽²⁾
Tesla Sets Deliveries Record Amid Tax Credit Rush
Tesla delivered 497,099 vehicles in Q3, setting a new record as the EV maker was struggling to meet delivery expectations throughout 2025. The new delivery record has surpassed the previous high of 495,570 vehicles in Q4 2024, boosted from the $7,500 tax credit, where Tesla customers rushed to buy Tesla cars before the tax credit was removed on September 30. ⁽³⁾
Tesla also set a record in energy storage, reaching 12.5 gigawatt-hours, up from 9.6 GWh in Q2 and 6.9 GWh in Q3 2024. The surge in numbers has had a positive impact for Tesla’s Q3 finances. However, Cybertruck sales remained sluggish, as President Trump’s tariff policy continue to weigh on Tesla’s energy storage business. ⁽⁴⁾
Tesla Faces Margin Pressure Despite Record Deliveries
Despite record deliveries and strong energy performance, Tesla’s margins remain under pressure from competition and expensive research.
Tesla CEO Elon Musk warned in Q2 of challenging quarters in the future due to the termination of the tax credit, as Tesla earned $2.8 billion from tax credits in 2024. ⁽⁵⁾
The US tax credit loss could hurt Tesla’s profits in the coming quarters. Tesla’s business weakened in 2025, as Elon Musk was focused on the Trump administration’s policy agenda. When the Big Beautiful Bill was announced, it included the removal of the tax credits, which led to the fallout between Musk and President Trump.
Sales declined 13% in the first half of 2025, but Q3 sales improved as buyers rushed to buy EVs before the termination of the tax credit. Since then, the stock recovered to its December 2024 highs.
Key Factors to Watch During Tesla’s Earnings Call
Markets will be watching the earnings call for updates on AI and Robotaxi timeline, progress on Cybertruck ramp-up, Dojo and self-driving, alongside trends in China’s demand and pricing amid Tesla’s competition with BYD. Additionally, any remarks on the decline in ZEV and CAFE credit income could impact market sentiment during Tesla’s earnings call.
A proxy firm raised concerns about the stock award for Musk, even though he only gets payouts if he creates enormous value for Tesla shareholders. Tesla’s board said the record-setting pay package, a series of stock awards tied to ambitious targets, was designed to keep Musk’s attention on the electric vehicle maker. ⁽⁶⁾
The board has said the company needs its founder to lead its expansion into robotics and artificial intelligence. Musk owns 13.6% of the company, which helps in votes. Any updates on this factor could also shift sentiment.
IBM’s Shift to AI and Cloud
IBM’s Q3 earnings could help make a comeback in the AI market. Once a top innovator, IBM has changed over the past decade, shifting from old hardware to hybrid cloud and AI services.
IBM remains consistent with its earnings and still provides strong dividend payments, which is appealing during difficult times. Despite being less well-publicized than its competitors like Nvidia or Microsoft, its Watsonx AI platform and quantum initiatives are significant advancements. However, poor consumer exposure and slow revenue growth cast doubt on the viability of competing in AI. ⁽⁷⁾
IBM’s strength is in enterprise AI with focus on security, compliance and data governance. This helps in a market where firms worry about data protection.
IBM’s Recent Innovations and Partnerships
In Q3, IBM launched Power11 servers, delivering additional power up to 55%, leading to better core performance and providing 45% more capacity. This aids hybrid setups on-site or in the cloud. ⁽⁸⁾
IBM’s subsidiary’s Neudesic renewed its Microsoft Cloud Security Specialization. This reinforces expectations in securing Azure and on-premises systems.
IBM also partnered with AMD on open-source platforms for quantum-centric supercomputing. This lets users run complex algorithms on quantum hardware. ⁽⁹⁾
Deutsche Telekom used IBM’s AI to improve IT processes. These moves could help Q3 results. IBM holds a strong spot in the competitive cloud market against Microsoft, Oracle, and Amazon. Its focus on innovation also supports long-term growth.
Key Factors to Watch During IBM’s Earnings Call
The market’s attention will be on IBM’s AI and hybrid-cloud services sectors’ progress, which includes the company’s generative AI business growth and the need for new automation tools. The earnings call will focus on how the increase of consultancy and weakened infrastructure are being compensated by the software and cloud divisions.
The focus will also be on IBM’s free cash flow and profit margins, as the company aims to boost profitability with its cost-efficiency measures. Updates on forward guidance or new AI partnerships could also impact sentiment, especially as IBM positions itself against cloud leaders like Microsoft and Amazon.
Bottom Line
As Tesla and IBM get set to report their Q3 earnings, markets are focused on how both tech giants could manage their growth and challenges. Tesla’s record deliveries and AI innovation still face challenges such as soft margins and reduced tax credits, while IBM’s transition towards AI and hybrid cloud services aims to prove its resilience in the industry despite the strong competition.
Both companies’ updates will offer a more comprehensive understanding of how tech executives are negotiating margin pressures, the need for automation, and changing investor expectations in a cooling global economy.
