From being the worst performer in the Magnificent Seven to the best-performing, Tesla (NASDAQ:TSLA) stock has been extraordinarily volatile for a mega-cap company in 2024.

However, Tesla gave back some of its recent gains in pre-market trading on 23 July after its second-quarter earnings missed expectations.

The stock was down around 2% before the results call. It fell a further 7% after the market closed.

So, what happened, and is this an opportunity for UK investors?

Another painful quarter

The electric vehicle maker reported revenue of $25.5bn for the second quarter, reflecting a modest 2.3% increase year on year.

However, the all-important earnings per share (EPS) fell short of expectations at $0.52, compared to the consensus estimate of $0.62 and down from $0.91 a year ago.

The company delivered 443,956 vehicles during the quarter — slightly more than analysts expected — and up from Q1. Production stood at 410,831 vehicles, suggesting Tesla is reducing its stockpile.

Meanwhile, the company’s gross margin stood at 18%, slightly down from 18.2% a year ago. That reflects the pricing cuts Tesla has enacted to put pressure on its loss-making peers.

The balance sheet was in a strong position at the end of the quarter with $30.4bn in cash, putting it in a strong position for future Robotaxi and artificial intelligence (AI) investments.

What does this all mean?

Unless someone follows Tesla stock regularly, it can be hard to understand what’s going on with the share price and the valuation.

After two disappointing quarters, we’d expect the stock to be trading much lower. But that’s not the case, and it’s starting to look incredibly expensive.

It’s now trading at 98.4 times forward earnings. Just let that sink in.

However, Elon Musk doesn’t want investors to see Tesla as a car company. And he’s been very successful in convincing people to invest in Tesla for its future projects — the Robotaxi, the Optimus robot, and its energy business.

In fact, after the disappointing Q1 earnings, and with the share price slipping, Musk took to X to promise the unveiling of the Robotaxi on 8 August.

And this created the hype Musk wanted.

However, it was confirmed in the Q2 results that Musk was a little optimistic, and the unveiling will be pushed back further.

That’s a kick in the teeth for anyone who invested in Tesla expecting a ready-to-deploy Robotaxi on 8 August.

It’s also a bit embarrassing for some of Musk’s biggest supporters like Cathie Wood whose Ark Invest fund recently projected Tesla’s Robotaxi business will deliver more than £900bn in revenue in 2029 alone.

Is this an opportunity for UK investors?

Around 18 months ago, Tesla shares dropped to around $100 each, and I didn’t buy because the pound was so weak.

Now the pound is much stronger — around 30% stronger — and it may not stay this way forever. So, in that respect, it could be a good time to buy US-listed stocks like Tesla.

However, the dip in the share price post-earnings doesn’t look like a buying opportunity to me.

Yes, Tesla has a huge amount of potential, but I’m yet to see the technological breakthroughs that will deliver on that promise.

Without the tech, it’s just a hugely expensive car company.