Tesla stock hasn't been this oversold in more than a year

Tesla stock hasn't been this oversold in more than a year Brian Sozzi · Executive Editor Tue, July 28, 2026 at 4:30 PM GMT+2 2 min read TSLA ^GSPC A brutal year for Tesla ( TSLA ) investors is getting even more brutal. Quick insight: The post-earnings slide in Tesla stock has made it the most oversold since March 2025, according to Yahoo Finance AlphaSpace data . Overbought and oversold levels for a stock are tracked by the relative strength index, or RSI (bottom red line in the chart below).

The RSI is a momentum indicator that measures the speed and magnitude of a stock's recent price movements on a scale from 0 to 100. An RSI reading above 70 is generally viewed as a sign that a stock has risen too fast and could be due for a pullback. A reading below 30 suggests a stock may be oversold and could be poised for a rebound.

Tesla's RSI currently stands at 14. Shares are down 30% this year compared to an 8% gain for the S&P 500 ( ^GSPC ). The why: The sell-off in Tesla has intensified after execs offered few concrete updates on the pace of its Robotaxi rollout or the commercialization timeline for its Optimus humanoid robot during its earnings call last week.

This was on top of a brutal earnings miss versus Wall Street estimates, All of this has left investors questioning when the company's massive AI investments will begin to pay off. Tesla said it will commit $25 billion in capital expenditures for 2026, roughly three times its historical spending. A significant increase is also expected in 2027 as Musk ramps up Optimus and Robotaxi production .

  In a note on Tuesday, Deutsche Bank analyst Edison Wu warned, "We think it's fairly clear Robotaxi and especially Optimus (supply chain) are scaling slower than anticipated which is disappointing the market. Moreover, the sentiment towards physical or embodied AI has tapered down and the prospect of a SpaceX merger has likely added another element of volatility. Overall, we suspect we're entering a tricky period of time where Tesla may not demonstrate any significant milestones until late in the year while cash burn increases materially.

" Bottom line: Tesla's stock has officially entered falling knife territory. Try catching it with your hands at your own risk. Brian Sozzi is Yahoo Finance's Executive Editor, host of the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance's editorial leadership team.

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