Tesla (TSLA) shares fell on Friday as SpaceX made its stock market debut at $150 per share, fueling speculation among some investors that capital may be rotating from Tesla into SpaceX.
Tesla stock was down by about 2.36% in late morning trading, after spending much of the morning swinging between mild gains and losses.
Shares have swung more than 3% in either direction during each of the past five trading days, with market participants increasingly linking some of that turbulence to SpaceX’s blockbuster public offering.
SpaceX opened at $150 per share, much below earlier indications near $175 but still roughly 11% above the IPO price of $135.
Soon after, the stock topped $160, pushing the company above a $2 trillion market cap.
“I believe many retail investors buying SPCX this week will lighten up on their TSLA positions to fund their SPCX shares,” Gary Black, managing partner at The Future Fund, wrote on X yesterday.
Investors face a choice between two Musk narratives
Research firm Trefis said SpaceX’s public debut has created a direct comparison between Musk’s two largest corporate bets.
“SpaceX (SPCX) hits public markets today at a touted $1.75 trillion valuation, and for the first time, investors have to choose between two of Musk’s biggest bets – SpaceX and Tesla (TSLA) – rather than just one,” the firm said.
According to Trefis, both companies trade primarily on future expectations rather than traditional valuation measures.
Yet the nature of those expectations differs significantly.
The firm’s analysis suggests SpaceX enters public markets with a valuation exceeding 90 times trailing sales, compared with Tesla’s roughly 14 times sales multiple.
While both metrics imply lofty valuations, Trefis argued that investors are buying very different business models.
Tesla’s bull case has shifted from EV to AI
Tesla’s investment case has evolved considerably from its early years as an electric vehicle disruptor.
The company reported 2025 revenue of $94.8 billion, down 3% from the previous year.
Automotive revenue declined 10% to $69.5 billion, marking Tesla’s first annual revenue contraction.
Vehicle deliveries also fell 9%, while operating margins continued a multi-year decline.
Competition has intensified as Chinese automaker BYD overtook Tesla as the world’s largest electric vehicle seller in 2025, delivering 2.26 million vehicles.
As a result, investors have increasingly shifted their focus away from Tesla’s car business and toward future projects such as robotaxis, autonomous driving software, and the Optimus humanoid robot.
Trefis argued that the company’s bull case now depends largely on those initiatives.
“So the bull case has shifted — from EV leader to physical AI company. It now rests on the Optimus robot and the robotaxi network. The problem is that none of these is a slam dunk,” the firm said.
The report also highlighted growing competition in autonomous driving, noting that Alphabet’s Waymo currently operates more fully autonomous taxis and has accumulated more real-world driverless miles.
However, analysts at The Motley Fool have suggested that Tesla could be an attractive buy today if shares decline amid the SpaceX IPO hype.
SpaceX’s businesses show stronger operating momentum
By contrast, Trefis argues that SpaceX’s core operations are already producing tangible results.
The company generated $18.7 billion in revenue during 2025, with Starlink contributing $11.4 billion.
The satellite internet business delivered a 63% EBITDA margin while revenue grew 86% year over year.
Although SpaceX reported a consolidated net loss of $4.9 billion, much of that stemmed from losses at xAI, which recorded a $6.4 billion operating deficit as it expanded data center capacity and AI infrastructure.
Excluding xAI, the company’s financial profile appears substantially stronger.
Trefis noted that Starlink’s subscriber base expanded from 2.3 million users in 2023 to 8.9 million by the end of 2025 before reaching 10.3 million by March 2026 across 164 countries.
The company recently increased Starlink subscription prices, a move analysts interpreted as evidence of growing pricing power.
The launch business remains another major competitive advantage.
SpaceX increased launches from 98 in 2023 to 170 in 2025 and currently controls roughly 60% of the global launch market.
Competitors remain years behind in reusable rocket technology, reinforcing SpaceX’s dominant position.
SpaceX or Tesla: the better bet
The biggest uncertainty within SpaceX remains xAI.
While the unit generated $3.2 billion in revenue last year, it also posted substantial operating losses.
Nevertheless, Trefis noted that the business is already monetizing data-center capacity through contracts with major technology firms, including Google and Anthropic.
Longer term, investors are closely watching SpaceX’s ambitions around orbital data centers, which could eventually provide computing capacity in space.
The concept remains speculative, but proponents argue it could offer significant advantages in cooling efficiency and energy economics.
For now, investors appear willing to assign considerable value to those possibilities.
“SpaceX is expensive because it’s winning. Tesla is expensive because investors are hoping it will,” Trefis wrote.
“SpaceX at $135 is not cheap. At 90x sales, it may not even be a good investment. But between the two Musk narratives, it is the one with more evidence, stronger moats, and fewer assumptions doing the heavy lifting,” the firm concluded.
Analysts at The Motley Fool think differently.
“Both of these stocks look highly expensive, but if I were buying one of them, it would be Tesla, simply because it already has some strong financials, and its business is in much stronger shape, making it a safer option,” wrote David Jagielski of The Motley Fool.
He added that SpaceX faces the challenge of funding highly ambitious growth plans that are likely to require significant capital raising in the years ahead.
The stock could also experience considerable volatility following its market debut.
“Although investors may be hopeful of an early rally, there’s also a strong possibility that it could end up crashing under the weight of its massive valuation. Tesla would, by default, become the safer and better overall stock to buy,” he said.
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