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ETFs to Watch as Tesla Shares Slump Despite Q1 Earnings Beat
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Key Takeaways
Tesla beat Q1 EPS and revenue estimates, but shares fell after a $5B capex hike tied to AI plans.
Tesla's shift toward Robotaxi, AI, and robots raises concerns over long-term margin profile.
Tesla-heavy ETFs like XLY and VCR offer diversified exposure, reducing single-stock risk.
Shares of Tesla (TSLA - Free Report) initially rose about 4% in extended trading on April 22, (as cited in CNBC) following its first-quarter 2026 results. However, the momentum vanished the following day as shares dropped 3.6%. The electric vehicle (EV) maker’s announcement of a $5 billion increase in capital expenditure guidance during the earnings call likely dampened investor confidence, triggering the slump in TSLA’s share price.
This capex hike is largely earmarked for AI-related initiatives, specifically the infrastructure required to scale the Robotaxi network and the mass production of Optimus.
While this robust pipeline and the recent price pullback may tempt dip-buyers, many remain wary of Tesla’s long-term margin profile, with the company lately shifting its focus from EVs to self-driving technology and humanoid robots. While the company has been steadily testing driverless cars in its ride-hailing service in Texas, it still relies on EV sales for the vast majority of its revenues, and a market-ready Robotaxi is yet to enter volume production.
Tesla’s legacy EV business faces intensifying pressure from rivals offering higher-spec, lower-cost models against an increasingly aging lineup.
Against this backdrop, a risk-averse investor may prefer to avoid direct single-stock exposure and instead consider exchange-traded funds (ETFs) with significant weightings in Tesla. By holding a diversified basket of industry leaders alongside Tesla, these funds help mitigate the idiosyncratic risks tied to a single company’s strategic pivot, spreading exposure across multiple sectors.
Before highlighting such ETFs, it would be helpful to assess Tesla’s first-quarter performance across key metrics.
A Brief Analysis of TSLA’s Q1 Results
Tesla reported first-quarter 2026 earnings per share of 41 cents, which beat the Zacks Consensus Estimate by 13.9% and improved 52% from the year-ago figure. Total revenues of $22.39 billion also surpassed the Zacks Consensus Estimate by 2.1% and rose 16% year over year.
For a change, Tesla’s vehicle deliveries improved 6% on a year-over-year basis.
On the order backlog front, Tesla ended the quarter with the highest first-quarter order backlog in over two years.
In its automotive business, TSLA witnessed a resurgence in demand in the EMEA region and certain countries like France and Germany, while in APAC, solid delivery growth was observed in South Korea and Japan.
However, its energy storage business remains inherently lumpy, tied to customer deployment timelines.
Looking ahead, the company expects to begin volume production of both the Cybercab and the Tesla Semi this year. The company is also on track to start production of Megapack 3 later in 2026.
Tesla is also preparing to begin operations at its first large-scale Optimus factory in the second quarter of 2026, with the initial production line expected to replace the Model S and Model X lines in Fremont. It is also expanding its on-site AI training infrastructure to ensure adequate compute capacity for the development of its AI products and services.
Tesla-Heavy ETFs to Watch
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
This fund, with assets under management (AUM) worth $23.41 billion, offers exposure to 48 companies from specialty retail; broadline retail; hotels, restaurants and leisure; textiles, apparel and luxury goods; household durables; automobiles; automobile components; distributors; leisure products; and diversified consumer services industries. Tesla holds the second position in this ETF, with 17.66% weightage.
XLY has soared 20.1% over the past year. It charges 8 basis points (bps) as fees. The fund traded at a good volume of 7.53 million shares in the last trading session.
Global X PureCap MSCI Consumer Discretionary ETF (GXPD - Free Report)
This fund, with net assets worth $34.3 million, provides exposure to 50 companies from the Consumer Discretionary sector. Tesla holds the second position in this fund, with 17.13% weightage.
GXPD has gained 5.3% over the past year. It charges 15 bps as fees. The fund traded at a volume of 0.03 million shares in the last trading session.
This fund, with net assets worth $5.6 billion, offers exposure to 288 U.S. companies from the consumer discretionary sector. Tesla holds the second position in this ETF, with 16.35% weightage.
VCR has gained 20.8% over the past year. It charges 9 bps as fees. The fund traded at a volume of 0.05 million shares in the last trading session.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
This fund, with net assets worth $1.64 billion, provides exposure to 252 consumer discretionary companies. Tesla holds the second position in this ETF, with 16.31% weightage.
FDIS has surged 20.7% over the past year. It charges 8 bps as fees. The fund traded at a volume of 0.46 million shares in the last trading session.
This fund, with a net asset value of $53.62 per share as of April 23, 2026, offers exposure to the seven largest NASDAQ-listed companies. Tesla holds the seventh position in this fund, with 12.44% weightage.
QQQU has gained 87.9% over the past year. It charges 98 bps as fees. The fund traded at a volume of 0.09 million shares in the last trading session.
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ETFs to Watch as Tesla Shares Slump Despite Q1 Earnings Beat
Key Takeaways
Shares of Tesla (TSLA - Free Report) initially rose about 4% in extended trading on April 22, (as cited in CNBC) following its first-quarter 2026 results. However, the momentum vanished the following day as shares dropped 3.6%. The electric vehicle (EV) maker’s announcement of a $5 billion increase in capital expenditure guidance during the earnings call likely dampened investor confidence, triggering the slump in TSLA’s share price.
This capex hike is largely earmarked for AI-related initiatives, specifically the infrastructure required to scale the Robotaxi network and the mass production of Optimus.
While this robust pipeline and the recent price pullback may tempt dip-buyers, many remain wary of Tesla’s long-term margin profile, with the company lately shifting its focus from EVs to self-driving technology and humanoid robots. While the company has been steadily testing driverless cars in its ride-hailing service in Texas, it still relies on EV sales for the vast majority of its revenues, and a market-ready Robotaxi is yet to enter volume production.
Tesla’s legacy EV business faces intensifying pressure from rivals offering higher-spec, lower-cost models against an increasingly aging lineup.
Against this backdrop, a risk-averse investor may prefer to avoid direct single-stock exposure and instead consider exchange-traded funds (ETFs) with significant weightings in Tesla. By holding a diversified basket of industry leaders alongside Tesla, these funds help mitigate the idiosyncratic risks tied to a single company’s strategic pivot, spreading exposure across multiple sectors.
Before highlighting such ETFs, it would be helpful to assess Tesla’s first-quarter performance across key metrics.
A Brief Analysis of TSLA’s Q1 Results
Tesla reported first-quarter 2026 earnings per share of 41 cents, which beat the Zacks Consensus Estimate by 13.9% and improved 52% from the year-ago figure. Total revenues of $22.39 billion also surpassed the Zacks Consensus Estimate by 2.1% and rose 16% year over year.
For a change, Tesla’s vehicle deliveries improved 6% on a year-over-year basis.
On the order backlog front, Tesla ended the quarter with the highest first-quarter order backlog in over two years.
In its automotive business, TSLA witnessed a resurgence in demand in the EMEA region and certain countries like France and Germany, while in APAC, solid delivery growth was observed in South Korea and Japan.
However, its energy storage business remains inherently lumpy, tied to customer deployment timelines.
Looking ahead, the company expects to begin volume production of both the Cybercab and the Tesla Semi this year. The company is also on track to start production of Megapack 3 later in 2026.
Tesla is also preparing to begin operations at its first large-scale Optimus factory in the second quarter of 2026, with the initial production line expected to replace the Model S and Model X lines in Fremont. It is also expanding its on-site AI training infrastructure to ensure adequate compute capacity for the development of its AI products and services.
Tesla-Heavy ETFs to Watch
Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
This fund, with assets under management (AUM) worth $23.41 billion, offers exposure to 48 companies from specialty retail; broadline retail; hotels, restaurants and leisure; textiles, apparel and luxury goods; household durables; automobiles; automobile components; distributors; leisure products; and diversified consumer services industries. Tesla holds the second position in this ETF, with 17.66% weightage.
XLY has soared 20.1% over the past year. It charges 8 basis points (bps) as fees. The fund traded at a good volume of 7.53 million shares in the last trading session.
Global X PureCap MSCI Consumer Discretionary ETF (GXPD - Free Report)
This fund, with net assets worth $34.3 million, provides exposure to 50 companies from the Consumer Discretionary sector. Tesla holds the second position in this fund, with 17.13% weightage.
GXPD has gained 5.3% over the past year. It charges 15 bps as fees. The fund traded at a volume of 0.03 million shares in the last trading session.
Vanguard Consumer Discretionary ETF (VCR - Free Report)
This fund, with net assets worth $5.6 billion, offers exposure to 288 U.S. companies from the consumer discretionary sector. Tesla holds the second position in this ETF, with 16.35% weightage.
VCR has gained 20.8% over the past year. It charges 9 bps as fees. The fund traded at a volume of 0.05 million shares in the last trading session.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
This fund, with net assets worth $1.64 billion, provides exposure to 252 consumer discretionary companies. Tesla holds the second position in this ETF, with 16.31% weightage.
FDIS has surged 20.7% over the past year. It charges 8 bps as fees. The fund traded at a volume of 0.46 million shares in the last trading session.
Direxion Daily Magnificent 7 Bull 2X Shares (QQQU - Free Report)
This fund, with a net asset value of $53.62 per share as of April 23, 2026, offers exposure to the seven largest NASDAQ-listed companies. Tesla holds the seventh position in this fund, with 12.44% weightage.
QQQU has gained 87.9% over the past year. It charges 98 bps as fees. The fund traded at a volume of 0.09 million shares in the last trading session.