Tesla (NASDAQ:TSLA), led by CEO Elon Musk, faced a challenging third quarter in 2023, with shares declining 4.78% to $242.68 per share after the market closed on Thursday, a figure that is within the range of the InvestingPro Fair Value of $251.14. The automaker reported lower-than-anticipated revenues of $23.35 billion, falling short of the projected $23.9 billion. Adjusted earnings per share came in at 66 cents, compared with the expected 73 cents, and the company posted a gross profit margin of 17.9%.
Despite these financial setbacks, Tesla has maintained its Bitcoin holdings since 2021 at $184 million, even after selling 75% of its initial Bitcoin investment in 2022. The company's decision to preserve its Bitcoin holdings valued at $312 million in Q3 2023 resulted in a $9 million loss from the previous quarter. This move aligns with the InvestingPro Tip that Tesla holds more cash than debt on its balance sheet, a sign of financial stability.
Investments in artificial intelligence (AI) projects also weighed on Tesla's balance sheet, with research and development expenses reaching $1.16 billion. The company doubled its computing power by employing one of the world's largest supercomputers, leading to a more than twofold increase in computing capacity from the previous quarter. It's worth noting that, according to InvestingPro data, Tesla's revenue growth for the last quarter was 39.99%, demonstrating the company's ability to generate increased revenues despite substantial R&D expenses.
In May 2023, at the annual shareholders' meeting, Tesla demonstrated the capabilities of Tesla Bots, which can recognize and manipulate objects using enhanced motor torque control AI training. Despite increased operating expenses of $2.41 billion in Q3 due to AI investments, Tesla still managed a nearly 9% year-on-year revenue growth. InvestingPro metrics reveal that Tesla's operating income, adjusted for the last quarter, stood at $12.65 billion, which is a testament to the company's financial performance.
Noteworthy updates include CYBERTRUCK pilot production surpassing 125,000 units ahead of its November launch and price cuts on some EV models and FSD Beta software. Despite a 7% Q3 delivery decline, Tesla remains committed to achieving 1.8 million vehicle deliveries in 2023. This ambitious goal is in line with the InvestingPro Tip that Tesla is a prominent player in the Automobiles industry.
The company's steady Bitcoin holdings and continued investments in AI reflect a financial prudence strategy amidst market uncertainties, as it navigates the challenges of lower-than-expected revenues and increased operational costs. Such a strategy aligns with the InvestingPro Tip that Tesla operates with a high return on assets, which was 15.32% for the last quarter. For more insights like these, check out the InvestingPro Tips, which offer 21 additional tips on Tesla and other companies.
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