Tesla reported second-quarter earnings that missed Wall Street expectations, although revenue exceeded forecasts, sending the company’s stock down about 4% in after-hours trading.

Revenue rose 26% from a year earlier to $28.24 billion, while net income fell 5% to $1.11 billion.

Profit margins declined as lower vehicle prices, reduced regulatory credit revenue, and higher spending on artificial intelligence and research weighed on results.

Tesla’s automotive, energy, and services businesses all posted revenue growth, but operating expenses surged 47%, significantly reducing profitability, CNBC has reported.

CEO Elon Musk continues to shift the company’s focus from traditional vehicle sales toward artificial intelligence, autonomous Robotaxis, and Optimus humanoid robots.