Tesla Stock Depends on Musk’s Robot Army. Why Fierce Competition Is a Problem.

(PATRICK T. FALLON/AFP via Getty Images)

It’s probably one of the more unusual requests from a public company—a $1 trillion paycheck to build an “enormous robot army.” But Tesla CEO Elon Musk is in the business of selling the future and that’s a crowded field nowadays—so it pays to go big.

Musk’s robot pitch is part of a much-needed new vision for his company. Tesla earnings dived despite growing vehicle sales, which were juiced by a rush to buy before the expiration of a federal tax credit. An increasingly competitive EV market raises the stakes for the success of Tesla’s robo-taxi and artificial-intelligence initiatives.

The problem is it’s not clear Musk has the unique public and political profile as America’s visionary entrepreneur he once had. Nvidia CEO Jensen Huang is also keen on parlaying his AI chip success into robotics. Meanwhile, the Trump administration is less interested in the environmental benefits of EVs than the strategic advantages of domestic semiconductor manufacturing, rare-earth production, and now quantum computing, according to The Wall Street Journal.

Retail investors—traditionally some of Tesla’s biggest fans—are now spoiled for choice when it comes to narratives about companies poised to dominate future industries, be it AI plays such as Palantir or quantum stocks like IonQ. Some have even returned to an old vision of the future by bidding up former artificial-meat favorite Beyond Meat .

It’s hard to value the potential growth of such businesses, which is why speculative meme-stock manias can take hold so easily. Tesla has long traded at a price-to-earnings multiple its auto maker rivals couldn’t dream of, largely because of the credit given to Musk’s ability to make his visions into reality. Now he needs to prove it again.

— Adam Clark

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Tesla Earnings Disappoint as AI Ambitions Near Inflection Point

Tesla’s third-quarter results disappointed, missing Wall Street’s expectations despite delivering a record number of electric vehicles during the quarter. Lower-priced vehicles could explain some of the disappointment on profit margins. Tesla’s main focus these days is using artificial intelligence.

• CEO Elon Musk told analysts and investors that Tesla is nearing a critical inflection point with AI, which powers everything from its autonomous driving capabilities to its robots. When autonomous vehicles take over, it will hit “like a shock wave,” he said.
• Tesla’s operating profit dropped 40% to $1.6 billion, while adjusted earnings were 50 cents a share and sales were $28.1 billion. The 12% revenue gain from a year ago followed two straight quarters of declines. The burst in sales is explained by the expiration of tax credits for EV buyers.
• Tesla said it’s hard to project volumes given changing EV policies and geopolitical uncertainty, but that Tesla’s purpose-built Cybercab was on track for 2026 production and that first-generation Optimus robot production lines are being installed in anticipation of “volume production.”
• Tesla had about $400 million in tariff-related costs during the quarter, according to CFO Vaibhav Taneja, split between its automotive and energy businesses. Taneja said the energy business feels the weight of tariffs more relative to the cost of goods sold for that unit.

What’s Next: Shareholders vote on Musk’s proposed $1 trillion pay package leading up to Tesla’s Nov. 6 annual meeting. Proxy advisors ISS and Glass Lewis have both recommended voting against the pay. Several nonprofits and unions have also banded together to create a “Take Back Tesla” website, arguing against Musk’s pay.

— Al Root and Janet H. Cho

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Federal Worker Pay Is on Ice. Dueling Bills Will Probably Fail.

Senate lawmakers have queued up plans to pay federal workers through the duration of the shutdown, but neither bill is likely to pass. That’s because neither party likes the other’s proposal, and both lack the 60 votes needed for success. But the shutdown continues after a failed Senate vote Wednesday.

• A Republican bill, sponsored by Minnesota Sen. Ron Johnson, would pay non-furloughed workers as well as contractors who support their work. The Democrat version by Maryland’s Chris Van Hollen and Michigan’s Gary Peters, aims to pay all federal workers regardless of their furlough status.
• Currently, some 700,000 civilian federal workers have been furloughed without pay, with another million or so working without pay. Military members got paid last week using unspent research funds, which some have called illegal. The Coast Guard plus some 70,000 law enforcement officers are also getting paid similarly.
• Many federal workers got a partial paycheck on Oct. 10 and could receive no pay at all this Friday. Air-traffic controllers, who must report to work, will miss their first full paycheck later this month. Other workers are being paid through funds not tied to appropriations. While no vote has been scheduled on the bills, they are expected as soon as today.
• President Donald Trump is embarking on an almost weeklong trip to Asia on Friday. Since his input is likely a necessary ingredient for a breakthrough in shutdown negotiations, his departure could mean most of the government remains closed for at least the next week.

What’s Next: Lawmakers face their next critical date on the shutdown on Nov. 1, the start of open enrollment in most states for health plans offered under the Affordable Care Act. Expiring subsidies that covered the cost of those plans for millions of Americans is a key sticking point with the funding bill.

— Anita Hamilton and Joe Light

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Southwest Says Changes Are Working, Projecting a Record Fourth Quarter

Southwest Airlines soared past third-quarter expectations, reporting record revenue and profit higher than Wall Street’s and its own projections in the midst of the company’s “most significant transformation.” Southwest expects a record quarterly operating revenue and meaningful margin expansion in the fourth quarter.

• After decades of open seating and letting bags fly free, Southwest started selling assigned and extra legroom seating for travel beginning Jan. 27, 2026, among other changes. But already they started seeing positive demand trends in July. CEO Bob Jordan said they are encouraged by the momentum.
• The carrier reported adjusted earnings of 11 cents a share on revenue of $6.95 billion. Third-quarter passenger revenue rose 1%, to a third-quarter record of $6.3 billion. Fourth-quarter unit revenue is expected to rise 1% to 3% on a 6% gain in capacity from a year ago.
• The outlook depends on demand strength remaining at current levels through the end of the quarter and reflects planned acceleration of company initiatives, the effects of the government shutdown, and a 2-point rise in capacity for the fourth quarter from July.
• While the changes risk losing market share, Raymond James analyst Savanthi Syth expects them to be outweighed by the benefits of higher ancillary revenue and lower costs, noting that Southwest carried twice as many bags as its peers before it started charging.

What’s Next: Southwest management will discuss third-quarter results at a conference call later today. For the full year, Southwest expects adjusted earnings before interest and taxes of $600 million to $800 million.

— Callum Keown and Janet H. Cho

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This Odd Couple in the Markets Signals Speculative Fever

When the stock of a company that hasn’t posted a quarterly profit in more than five years surges more than 140% in one day, and the world’s benchmark flight-to-safety asset falls the most in five years, it is safe to say there is something weird happening in financial markets.

• The market’s odd couple? Beyond Meat and gold . The fake meat maker’s enormous three-day gains suggest speculative appetite remains deeply embedded in the market. Meanwhile gold, which has rallied all year, slumped nearly 8% this week. That suggests investors have a fear of missing out, or FOMO.
• “We do see some signs of irrationality, or speculative behavior, with a pickup in ’meme stock’ investing among retail investors guided by social media trends,” says Tony DeSpirito, global chief investment officer at BlackRock Fundamental Equities.
• Volatility surged last week, and stocks that might ordinarily be expected to go nowhere are taking off. Apollo Global’s chief economist Torsten Sløk points out that Russell 2000 small companies that are losing money have outperformed profitable companies in the past three months.
• Gold bullion prices have risen more than 33% from the beginning of August to Monday’s all-time high of $4,380 an ounce. But gold has also been affected by a lack of transparency tied to the U.S. government shutdown, now in its fourth week, which has seen the suspension of the crucial Commitments of Traders reports.

What’s Next: With President Trump sending mixed signals on China trade talks, a Supreme Court hearing on the legality of his tariffs invoked with emergency powers, and credit markets wobbling over worries linked to bad loans in the auto sector, investors are keeping a cautious eye on headline developments.

— Martin Baccardax

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—Newsletter edited by Liz Moyer, Patrick O’Donnell, Rupert Steiner