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Tesla Inc (NASDAQ:TSLA) shares are rallying Monday and there are multiple potential drivers. Here’s what you need to know.

Tesla stock is showing exceptional strength. What’s fueling TSLA momentum? What’s Moving TSLAAnalyst commentary is adding fuel ahead of Tesla’s delivery numbers later this week. JPMorgan has argued Tesla is being deliberate rather than lagging on robotaxis, saying software readiness matters more than fleet size right now and highlighting continued gains in FSD performance.

Safety Probe ClosureU.S. safety regulators also closed their investigation into power steering loss in about 376,000 Model 3 and Model Y vehicles from the 2023 model year. The probe ended after Tesla’s recall and over-the-air fix, removing a possible overhang that had been hanging over the name, Reuters stated.

That kind of regulatory cleanup does not always create a huge move by itself, but it can help sentiment when the stock already has other bullish catalysts in play. In a market trading on narratives, fewer headline risks can matter.

Critical Levels To Watch For TSLA StockTesla has pushed back above several short term trend markers, including the 20‑day simple moving average at $400.21, the 50‑day at $405.17, and the 100‑day at $397.80. Even with that improvement, the stock still sits 2.2% under the 200‑day simple moving average at $418.27. That combination usually signals a recovery phase inside a broader repair process rather than a fully established long term uptrend.

Momentum is best captured through RSI, which is currently at 52.94. This level is neutral and fits a stock that is trying to rebuild direction after a volatile stretch. RSI helps identify whether buying or selling pressure has become excessive, and in this case it shows that TSLA is not stretched despite Monday’s strength.

The larger technical obstacle remains the death cross that appeared in April, when the 50‑day simple moving average slipped below the 200‑day. That pattern often keeps longer term sellers active during rallies. The April swing low and the May swing high also show that TSLA has been trading inside a wide consolidation zone rather than trending cleanly.

Key Resistance: $453.00 — A nearby round number and pivot area where rebounds have stalled before, and where sellers may try to slow momentum as the stock approaches the 52‑week high region. Key Support: $393.50 — A close support zone near the 100‑day simple moving average where buyers have recently stepped in to defend the trend. TSLA Shares Are SoaringTSLA Price Action: Tesla shares were up 7.95% at $409.91 at the time of publication on Monday, according to Benzinga Pro.

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Tesla (TSLA +8.49%) is still one of the most important automakers in the world, even though investors are currently focused on Elon Musk's other public company, Space Exploration and Technologies Corp (SPCX +7.18%). That said, Tesla's stock has been holding up fairly well over the past year, rising around 17% as of this writing, just shy of the 18% gain for the S&P 500 index (^GSPC +1.18%).

Most investors expect the market to return 10% a year, on average, so it is hard to complain about 17%. Still, GE Vernova's (GEV +5.37%) stock price has doubled over the past 12 months as of this writing. And Caterpillar (CAT +3.58%) shares have risen by more than 150%. Can these two industrial giants, which aren't nearly as headline-grabbing as Tesla, keep up the outperformance?

Image source: Getty Images.

Cat and GE Vernova have huge backlogs Caterpillar makes massive earth-moving equipment and generators for creating energy in remote areas. GE Vernova makes the turbines used to generate power, along with other vital energy-producing and storing systems. They are both massive industrial businesses, with Cat supporting a $450 billion market cap and GE Vernova supporting a $280 billion market cap.

That said, the products these companies make take a long time to build. So customer orders are usually placed well in advance. At the end of the first quarter of 2026, Cat had a record backlog of $63 billion. That was up 79% year over year. GE Vernova's backlog stood at $163 billion at the end of the first quarter. While backlog orders can end up being canceled if business activity slows down during a recession, the huge backlogs these two companies have speak to a very strong operating environment.

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From a business perspective, there's no particular reason to believe either company will suddenly face severe hardship. Moreover, both lean into the significant demand for power driven by technologies such as artificial intelligence and electric vehicles. Caterpillar's earth-moving equipment is needed to build data centers and power plants, while its generators can provide power directly to data centers. GE Vernova sells turbines that utilities use to generate power, among other products. With electricity demand expected to increase by 60% between 2025 and 2045, these businesses are well-positioned for success.

Stock prices and business fundamentals don't always align The problem here is that, sometimes, Wall Street gets too excited about a company's business prospects. When that happens, shares are bid up to levels that discount the good news. Basically, the price already assumes all of the good news, even if it hasn't happened yet. And that can create material risk for shareholders. With GE Vernova up 100% in a year and Cat up 150%, you need to consider both the business and the valuation before buying.

The big problem here is Caterpillar, which has a price-to-sales ratio of 6.6x versus a five-year average of 2.5x. The price-to-earnings ratio is roughly 50x compared to a longer-term average of about 19x. It looks rather expensive right now. If you don't own it, you may want to keep it on your wishlist. During the next bear market, the price is likely to be far more compelling than it is today.

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GE Vernova is a bit more difficult to value because it has been a stand-alone business for only a few years. Its P/S ratio is 7.2x, and its P/E ratio is 30x. Neither of those figures is low on an absolute basis, so it would be hard to call the stock cheap. And management just increased its full-year guidance after just a single quarter, so the business is operating very strongly. Still, most investors should probably tread with a little caution. If Wall Street's mood shifts in a negative direction, this high flyer is likely to get caught in the downdraft.

One to watch and one to consider As businesses, both Cat and GE Vernova are likely to remain strong performers over the long term. But Wall Street doesn't always get price and value right over the short term. Between Cat and GE Vernova, GE Vernova is probably the more appealing choice right now. But given the lofty valuation on an absolute basis, it would be advisable to build a position over time rather than jumping in with both feet. Cat is probably best kept on the wishlist for now.

The ARK Innovation ETF (NYSEARCA:ARKK) has barely moved this year, gaining about 2% year to date through late June and sitting at roughly $78 per share.

In its latest autonomous vehicle roadmap, JPMorgan noted that Waymo has 640 autonomous vehicles registered in Texas, compared with just 84 for Tesla, even after Tesla expanded its robotaxi footprint beyond Austin into Dallas and Houston this year. Rather than viewing the gap as a competitive weakness, the firm argues Tesla is intentionally prioritizing software readiness over fleet expansion.

Why Tesla’s Robotaxi Fleet Is SmallerJPMorgan said Tesla has taken a deliberately measured approach to its robotaxi rollout despite investor excitement around the company’s autonomous driving ambitions.

“Our view. Tesla has been cautious in its robotaxi rollout in Austin, and more recently in Dallas and Houston,” the analysts wrote. “On the 1Q call, Tesla management talked about taking a very cautious approach to the rollout of robotaxis.”

According to the note, Tesla believes there are still “many known improvements” that can be made to its Full Self-Driving software before deploying unsupervised vehicles at scale. As a result, the company sees little value in rapidly expanding its commercial fleet while major software upgrades remain in development.

That stands in contrast to Waymo, which has aggressively expanded across Texas after launching in Austin in March 2025 and has since entered Dallas, Houston and San Antonio. Of the company’s 640 Texas autonomous vehicles, JPMorgan estimates about 594 are Jaguar I-PACEs, while 46 are the new sixth-generation Ojai robotaxis.

Tesla’s FSD Progress Could Matter More Than Fleet SizeJPMorgan argues that the robotaxi race is not simply about who has the largest fleet today.

The firm highlighted continued improvements in Tesla’s Full Self-Driving software, noting that FSD version 14.x has surpassed 2,000 miles to critical disengagement, representing roughly a 4.3-fold improvement over the approximately 460 miles achieved by version 13.x.

The analysts also pointed to Tesla’s safety statistics, which show vehicles operating with FSD (Supervised) in North America average 5.5 million miles before a major collision, more than eight times the U.S. average, while traveling about 1.6 million miles before a minor collision, roughly seven times the national average.

Cybercab Could Change The PictureWhile Waymo currently enjoys a sizeable lead in deployed robotaxis, JPMorgan believes Tesla’s strategy is geared toward a much larger rollout once its software reaches the desired level of maturity.

The firm noted that Cybercab has already entered pilot production, with volume production expected later this year, potentially setting the stage for a much faster fleet expansion than investors are seeing today.

For now, the numbers heavily favor Waymo. But JPMorgan’s takeaway is that Tesla’s smaller robotaxi fleet reflects a conscious product strategy rather than an attempt to win the deployment race as quickly as possible.

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I bought Tesla (NASDAQ:TSLA | TSLA Price Prediction) again last Friday, and I will probably buy it again next month. The bears on Reddit and the seven analysts carrying Sell or Strong Sell ratings have not talked me out of it, and neither has a year-to-date drawdown of -15.57%.

I keep coming back to the buy button because Tesla is the rare company where the cash flow statement and the science fiction roadmap are now pointing the same direction, and I want to own that before the market decides it agrees.

The Thesis I Keep Coming Back To The simple version: Tesla is turning into a vertically integrated AI and robotics company that still happens to print real automotive profits. In Q1, automotive gross margin expanded to 21.1% from 16.2% a year earlier, revenue grew 15.78% YoY to $22.387 billion, and operating income jumped 135.84% to $941 million. The core business is widening.

Three Reasons The Conviction Holds First, the balance sheet. Tesla closed Q1 with $44.743 billion in cash and equivalents, up 173.62% YoY, against a debt-to-equity ratio of 0.10 and net cash on the books. Free cash flow climbed 117.47% to $1.44 billion, and full-year 2025 FCF rose 73.69% to $6.22 billion. A company with that much cash funds its own moonshots.

Second, the software flywheel. Active FSD subscriptions hit 1.28 million, up 51% YoY, and the Services and Other segment grew 42% to $3.745 billion. Unsupervised Robotaxi rides are already live in Dallas and Houston, and FSD just cleared regulators in the Netherlands. Recurring software revenue at automotive scale is a different business than building cars.

Third, the optionality. Elon Musk told investors on the Q1 call that “Optimus will be our biggest product, not just Tesla’s biggest product ever, but probably the biggest product ever.” The Fremont line is designed for 1 million robots a year and the Gigafactory Texas line for 10 million. I just need those numbers to be non-zero.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Tesla didn't make the cut. Grab the names FREE today.

The Risk I Will Not Pretend Away The valuation is the real problem. A trailing P/E of 345, a PEG of 5.56, and EV/EBITDA of 116 leave no margin for error. Insiders have logged 32 recent transactions with net selling, and Polymarket traders give the Optimus release just a 9% probability by year-end. If FSD takes another year and Optimus slips into 2027, this stock can hurt.

What keeps me buying anyway is that the multiple is pricing the AI factory, and that AI factory is being built with real capex. CapEx is running at over $25 billion for 2026, R&D was $1.95 billion in Q1, and the AI5 chip taped out in April 2026. Every dollar of that spend is visible in the filings.

Why The Buy Button Stays Active Wall Street is split for a reason. 23 analysts rate Tesla a Buy and 24 do not, with a consensus target of $421.16 against today’s $379.71.

Ten-year holders are sitting on a 2,722.56% gain through every cycle of doubt. I am buying the company that funds its own future in cash, sells its software to over a million paying drivers, and has already built the line for the robot. The next decade just has to rhyme with the last.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Tesla didn't make the cut. Grab the names FREE today.

Jay Li doesn’t recommend getting sued by Tesla if you’re trying to get a startup off the ground. But he does think his company, Proception, might be better off for having endured the experience.

“I think it’s kind of like a resilience test, or pressure test,” he told TechCrunch in an exclusive interview. “People say that what doesn’t kill you makes you stronger, right?”

Li, who was a technical lead on Tesla’s Optimus humanoid robot program, was accused by his former employer last year of absconding with trade secrets to start Proception. But after months of trading legal blows, he finally reached a settlement with Tesla, which dismissed the lawsuit earlier this month. (Tesla did not respond to a request for comment.)

Now Li is free to tackle what he thinks is an even harder problem: making robot hands work like a human’s.

To help do that, Proception announced Monday that it has raised an $11 million seed round led by First Round Capital, with contributions from Y Combinator and early stage fund BoxGroup.

Proception also announced Monday that it is shipping the first batch of its “high-dexterity robotic hand” to “researchers and robotics companies,” while opening up to wider orders. The goal, Li said, is to become the top hand supplier to other companies that don’t want to spend the time or resources developing what’s known in the industry as “dextrous manipulation.”

While there’s been an avalanche of money and attention rushing into the world of robotics, Li believes not enough of that has gone to making robotic hands truly mimic a human’s hands.

One of the loudest voices talking about this challenge has actually been his old boss, Tesla CEO Elon Musk, who has said robot hands are one of the biggest engineering problems yet to be solved.

While Musk has maintained that Optimus robots could start working in factories in a matter of years, the consensus view is that making robotic hands equivalent to a human’s is still many years away. Kevin Lynch, the director of Northwestern University’s Center for Robotics and Biosystems, told the Wall Sreet Journal last year that his team believes it will be a decade until they are “functional and useful and able to do some of the things that humans do.”

Li thinks Proception can do it much faster, in large part because of how they’re collecting data.

Most companies training humanoid robots right now are using teleoperators to train their systems. A human wearing a virtual reality headset is able to see what a robot sees and manipulate what’s in front of that robot, then the robot can learn from the commands given by the human.

A big drawback to this approach, according to Li, is that the teleoperator is not receiving feedback from the objects the robot is touching. This approach is also limited to the number of robots a company has available at any given moment, Li said.

Proception’s solution is a glove laden with sensors. With human testers wearing the gloves (and a headset), Proception and its customers can capture “human hand interaction data without requiring a robot in the loop,” according to Proception’s press release.

This same glove also goes on the hand Proception is developing, acting as its sensor-packed “skin.” The hand has 22 degrees of freedom and multiple joints per finger to enable a “wide range of dexterous motions,” according to Proception.

Li said this approach will also let Proception and its customers gather finer, more task-specific data that can allow its robotic hands to more accurately resemble a human’s. He also thinks it is better suited to scale up.

“You need both hardware and data, and those need to come hand-in-hand to get [dextrous manipulation] to work. A lot of companies solely focus on hardware, or like hardware plus non-scalable data [collection],” he said. “We’re working on this highly dexterous hardware plus highly scalable data. We believe that’s a key combination to solve this problem.”

First Round partner Bill Trenchard, who led the investment in Proception, said this was a big reason why he backed Li.

“We think they will have the best hand in the market, maybe the most sophisticated hand today, and the underlying data and models to support that,” he told TechCrunch. “Dexterous manipulation is a very, very, very important part of the whole humanoid story going forward, and as many people have said, it’s sort of the last mile of getting these robots to be truly performant.”

Trenchard also praised Li’s ability to keep a cool head while being sued by his former employer.

“He was very upfront with us when this came out, and I think the team did an amazing job of keeping their heads down,” Trenchard said. “Jay’s a very strong leader.”

Li is also confident. After facing down Tesla’s “hardcore litigation department,” he told TechCrunch that he wouldn’t be surprised if the company comes calling for help as Proception grows.

“I think it will happen,” he said.

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Sean O’Kane is a reporter who has spent a decade covering the rapidly-evolving business and technology of the transportation industry, including Tesla and the many startups chasing Elon Musk. Most recently, he was a reporter at Bloomberg News where he helped break stories about some of the most notorious EV SPAC flops. He previously worked at The Verge, where he also covered consumer technology, hosted many short- and long-form videos, performed product and editorial photography, and once nearly passed out in a Red Bull Air Race plane.

You can contact or verify outreach from Sean by emailing [email protected] or via encrypted message at okane.01 on Signal.

Tesla stock is holding steady today. Where is TSLA stock headed? The NHTSA RollercoasterQ2 Deliveries on the HorizonOn June 24, Tesla, Sunrun, and Renew Home announced a framework to deliver more than 16 gigawatts of flexible energy capacity to hyperscalers and utilities, aggregating millions of existing home batteries, smart thermostats, and electric vehicles into what would be the largest distributed power plant in the country.

The framework requires no new hardware, software, or interconnection, and is deployable in months, not years. In Virginia alone, the companies have more than 300 megawatts available for immediate deployment, expected to grow to at least 500 megawatts by 2030. The deal puts Tesla’s Powerwall and energy ecosystem at the center of the AI data center power crunch narrative.

Tesla Shares GainTSLA Price Action: At the time of publication, Tesla shares are trading 0.89% higher at $383.09, according to data from Benzinga Pro.

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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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Tesla (TSLA +1.38%) and Elon Musk are making a big push to expand beyond electric vehicles (EVs). The company recently completed a tape-out for its upcoming AI5 computer chip, which will be deployed in new projects such as the Optimus humanoid robot.

Here's what the news means for Tesla and how it could impact the stock price in the years ahead.

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Expanding beyond vehicles A tape-out is when a computer chip design is sent to manufacturers for fabrication, essentially a final blueprint for the project. The AI5 chip has been sent to Samsung and Taiwan Semiconductor, with manufacturing planned to ramp over the next 12 to 18 months.

Tesla's latest chip boasts a 40x performance boost over the previous generation, and its goal is to help scale the two latest endeavors for the Musk technology company in humanoid robots and the Cybercab self-driving vehicle. Unlike other players in the robotics and self-driving car space, Tesla has designed its own chips, which should give it a cost advantage over those that rely on expensive suppliers like Nvidia.

In the long run, Tesla plans to build its own semiconductor manufacturing facility to further vertically integrate its robotics and artificial intelligence (AI) vision. The project, called Terrafab, will be built in Texas in conjunction with Space Exploration Technologies (SpaceX) and Intel. Like with its own chip designs, the theory is that this vertical integration will give Tesla a cost advantage as it scales up humanoid robot manufacturing in the years ahead.

Image source: Getty Images.

The future of Tesla stock Tesla is already working on designs for the AI6, which is reportedly being manufactured by Samsung. If you solely look at Musk's vision, there is a lot for shareholders to be excited about today. Who wouldn't want a future in which humanoid robots perform menial tasks, with everyone driven around by a self-driving Cybercab network?

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This vision is far from a reality right now. Plus, Tesla's stock already prices in much of this vision, which isn't guaranteed to come to fruition. Its market cap is $1.4 trillion, with a price-to-earnings ratio (P/E) of 348. 

It is smart for Tesla to design its own chips and eventually build its own chip factories. However, many pieces still need to come together over the next decade, and executing the humanoid robot vision should keep investors away from the stock at today's $1.4 trillion market cap.

Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel, Nvidia, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool has a disclosure policy.

Space Exploration Technologies (SPCX +0.15%), or SpaceX, has been a publicly traded company for seven days. Tesla (TSLA +1.38%) stock has been public for 16 years. SpaceX is the newer, shinier Elon Musk toy, and it's getting more attention from the two companies' co-CEO today.

Right now, there's one reason you might want to own SpaceX stock over Tesla. But I'm not 100% convinced this is the right choice.

Image source: Getty Images.

What to know about SpaceX SpaceX has three main areas of business, which it calls Space (old-school SpaceX), Connectivity (SpaceX's Starlink subsidiary), and AI -- the division Musk formed by merging artificial intelligence company Grok into social media company X, before he merged both those companies into SpaceX.

Of the three, Space is the best-known business and the one from which SpaceX derives its name. Starlink is the company's only profitable business, earning $4.4 billion in operating profit last year, according to the SpaceX IPO Prospectus.

SpaceX sees its brightest future in artificial intelligence; however, it predicts this division will account for $26.5 trillion of its eventual $28.5 trillion total addressable market (TAM). It's also the business where SpaceX splashed out $60 billion to acquire Cursor last week.

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What to know about Tesla Tesla is a little different. Like SpaceX, Tesla has a core business: selling electric cars. This division accounted for 86.5% of Tesla's $94.8 billion in revenue last year, according to data from S&P Global Market Intelligence.

Tesla also has an Energy Generation and Storage business -- solar power and batteries. Similar to the situation with SpaceX's Starlink vis-à-vis Space, this corollary business is arguably better than the business for which the company is best known. "Energy" at Tesla earns 30% gross profit margins -- twice as profitable as Tesla's Automotive unit!

Last and least is Tesla's robotics business, currently just a start-up that lacks its own division, though robotics is analogous to "AI" at SpaceX. According to Elon Musk, this business that barely registers today could one day be building 1 billion humanoid robots a year and lift Tesla's market value past $25 trillion.

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Both SpaceX and Tesla are very expensive stocks. Investors in both companies are betting heavily on presently unfulfilled prospects: abundant AI profits in the case of SpaceX, and 1 billion robots a year for Tesla.

Which dreams are more likely to materialize in the future is hard to say. What I can tell you is how the two stocks' valuations look today to minimize the risk of overpaying for a future that may not materialize.

Let's start with SpaceX. The space company generated $19.3 billion in revenue over the past year and lost $8.7 billion in the process. SpaceX boasts about $70 billion in net cash, which is great -- because SpaceX is burning nearly $20 billion in negative free cash flow per year.

Tesla, on the other hand, seems a much more stable business. Annual sales approach $98 billion and are profitable, with an operating profit margin of 4.9%. Free cash flow is positive -- $7 billion annually -- adding to Tesla's $30 billion in net cash on the balance sheet.

Of the two, I prefer Tesla as the less risky of the two very risky stocks.

Tesla logo is seen on the steering wheel of an electric vehicle at a dealership in Durango, northern Spain, October 30, 2023. REUTERS/Vincent West Purchase Licensing Rights, opens new tab

CompaniesJune 27 (Reuters) - U.S. safety regulators said on Saturday they had closed their probe into Tesla (TSLA.O), opens new tab vehicles over power steering ​loss, in view of a company recall which ‌was carried out last year.

The National Highway Traffic Safety Administration (NHTSA) said the investigation, which had the status of an engineering analysis, ​covered about 376,241 Model 3 and Model Y ​vehicles from the 2023 model year.

Stay up to date with the latest news, trends and innovations that are driving the global automotive industry with the Reuters Auto File newsletter. Sign up here.

NHTSA opened a ⁠preliminary evaluation in July 2023 into loss of steering ​control reports in Tesla Model 3 and Y vehicles after ​some owners reported an inability to turn the steering wheel or an increase in required effort.

In early 2024, the probe was upgraded ​to an engineering analysis to further investigate the alleged ​defect.

Tesla recalled 376,000 of its vehicles in the U.S. in early 2025, due ‌to ⁠a failure of the power steering assist feature that could make the vehicles harder to steer, particularly at low speeds, raising the risk of a crash.

However, it ​said the recall ​was not ⁠in response to NHTSA's investigation, which remained open at the time.

The recall said that ​Tesla had released an over-the-air software update designed ​to ⁠prevent overvoltage breakdown and overstress of motor drive components on the printed circuit board, which had caused an increase ⁠in ​steering effort.

In view of Tesla's recall, ​the NHTSA's Office of Defects Investigation said it was closing its engineering ​analysis.

Reporting by Disha Mishra in Bengaluru; Editing by Alexander Smith

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Although Tesla (TSLA +1.38%) has proven willing to split its stock in recent years when such a move made sense, conditions in 2026 don't resemble those that prevailed ahead of its two prior splits.

Image source: The Motley Fool.

Why shareholders cheer stock splits Fundamentally, a stock split doesn't do anything to enhance a company's value. For example, if a stock gets split 5-for-1 (as Tesla stock did back in 2020), each investor sees the number of shares they own quintuple, but their ownership stake in the company stays the same. A single pre-split share priced at $1,000 is the same as five post-split shares priced at $200,

Yet there are a couple of reasons why some shareholders want to see stock splits. The first relates to investor psychology: A split makes the stock appear to have a more favorable entry price. The hope is that the lower face value will attract more retail investors. And people may feel they are getting more for their money when they are able to own more shares.

There is also research suggesting that splits can help boost stock prices. Data published by Statista, sourced from Bank of America's Research Investment Committee, revealed that, over 40 years, companies that split their stocks saw average total returns of more than 25% in the 12 months following the announcement of a pending split. But companies generally only conduct splits after the stock price has risen significantly, and when management expects further strong business performances in the future.

With that context in mind, here are the key price points connected to previous Tesla stock splits.

Tesla's stock-split history When Tesla management previously chose to split its stock, its shares were at much higher prices than they are currently. On Aug. 11, 2020, when Tesla announced a 5-for-1 stock split, shares were trading at a bit under $1,400, and they shot up to above $2,200 before the split.

On Aug. 5, 2022, Tesla announced its second split ever, a 3-for-1. The day before that split, shares were trading at nearly $900. 

The stock is far from that level now, trading at around $375 on Thursday.

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The likelihood of a Tesla stock split in 2026 Based on the prices the stock traded at before its previous splits, it's improbable that Tesla will conduct one in 2026. History suggests that shares would need to nearly triple before such an action would even be considered.

Also, in the past, companies often chose to split their shares when they grew to prices that made them difficult for retail investors to purchase. But as fractional share investing is now available through most brokerages, companies may not see the need, even when shares reach unwieldy values. Instead, a higher stock price may be viewed as a strength, as it highlights investor demand.

For anyone considering investing in Tesla, its efforts in robotics, autonomous vehicles, robotaxis, and energy storage will be more important to the company's long-term returns on investment than any stock split.

Tesla, Inc. is upgraded to Strong Buy as medium-term catalysts, Cybercab and Optimus, move closer to commercialization. TSLA's unique manufacturing scale, FSD advancements, and brand value position it to dominate autonomous ride-hailing and robotics. Potential regulatory easing and modular manufacturing could enable TSLA to rapidly scale production and capture significant market share.

In Brief

Posted:

9:32 AM PDT · June 26, 2026

Image Credits:Getty Images Tesla has settled a lawsuit connected to a fatal 2023 crash involving a vehicle using the company’s advanced driver assistance system known as Full Self-Driving.

Bloomberg was first to report on the settlement. Terms were not disclosed.

The lawsuit was filed against Tesla and the driver by the daughter of Johna Story, a 71-year-old woman who was struck by a Tesla Model Y. Story was hit after she stepped out of her own vehicle to direct traffic around a crash that had occurred earlier due to sun glare.

The National Highway Traffic Safety Administration opened an investigation into Tesla’s FSD (Supervised) automated driving software in 2024 after four reported crashes in low visibility conditions — including the one involving Story. NHTSA said, at the time, it was investigating the driver assistance system to find out whether it could “detect and respond appropriately to reduced roadway visibility conditions,” such as “sun glare, fog, or airborne dust.” 

That investigation was upgraded in March 2026 to an engineering analysis. In that report, the agency wrote “Available incident data raise concerns that Tesla’s degradation detection system, both as originally deployed and later updated, fails to detect and/or warn the driver appropriately under degraded visibility conditions such as glare and airborne obscurants.”

While the settlement ends the family’s lawsuit, this upgraded NHTSA investigation has not yet been closed. At stake for Tesla for the federal investigation is a host of possible outcomes, including a recall.

The federal agency also opened an investigation into FSD in October 2025 after receiving reports the software caused the vehicles to run red lights or cross into the wrong lane.

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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

The electric vehicle maker's shares are sliding again, dragged down by negative headlines and worries about the broader market.

When a big-name stock executes a stock split, it gets a lot of attention. That's because stock splits are considered bullish indicators -- the company is splitting its stock to make it more affordable to retail investors. It also provides the company with greater flexibility in offering compensation packages that include stock equity for its employees. It's a win-win, generally.

That's why the 3-for-1 stock split that Tesla (TSLA 0.28%) announced in August 2022 got so much attention. Tesla was a high-flying stock, gaining 2,000% in the three years immediately before the split. Had you invested $10,000 into Tesla in August 2019, you would have had $210,000 the day of the split.

But against those lofty expectations, Tesla stock has been a disappointment since the split. It's gained only 28% since executing the split on Aug. 25, 2022, meaning that had you invested $10,000 in Tesla the day before the split, you'd only have $12,800. Meanwhile, the S&P 500 (^GSPC 0.01%) gained 77% over the same period, and a $10,000 investment in an S&P 500 index fund, such as the Vanguard 500 Index Fund ETF (VOO +0.00%), would have grown to nearly $17,800.

TSLA data by YCharts

Tesla, before and after the split Before the stock split, Tesla was riding high. The adoption of electric vehicles was in full force, and Tesla saw impressive growth as it expanded both domestically and overseas.

For example, when Tesla reported second-quarter earnings in 2022, the company hit $1 billion in quarterly net income for the first time. It posted revenue of $11.96 billion and earnings of $1.45 per share, beating analysts' expectations of $11.30 billion and $0.98 per share, respectively. It was a massive win for Tesla, which saw its net income rise from $438 million to $1.14 billion in a single quarter.

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Perhaps most importantly, Tesla's profit margins remained exceptionally high, at 28.4%.

But Tesla today is a very different company. Competition is fierce. Margins are down. And CEO Elon Musk got involved in both U.S. and European politics, which damaged the Tesla brand. A Yale University report estimates that Musk's political activities resulted in more than 1 million fewer Tesla sales. Tesla saw annual declines in automotive sales in both 2024 and 2025.

Image source: Tesla.

Tesla's revenues in the first quarter of this year were $19.3 billion, up 16% from a year ago. But even with that bright spot, Tesla's net income was just $47.7 million. The company hasn't seen $1 billion in quarterly net income since the fourth quarter of 2024.

Tesla is undergoing significant change today. The company is still an EV maker, but it's also investing heavily in Musk's vision for its Optimus robot line that he hopes to make available to both consumers and factories. Tesla continues to work on its full self-driving technology in hopes of securing approval for unsupervised, nationwide use. But both ventures are speculative and expensive.

The company's shrinking profitability explains why a $10,000 investment made before the stock split has dramatically underperformed both investors' expectations and the broader market.

Tesla (TSLA 0.28%) shares have soared 2,810% in the past decade (as of June 23). The success of the electric vehicle (EV) maker (which is one of the world's most valuable companies), coupled with the recent initial public offering of Space Exploration Technologies, has made CEO Elon Musk the world's first trillionaire.

On Tesla's first-quarter 2026 earnings call in April, Musk made a bold prediction that should spark the market's curiosity. Are the tech entrepreneur's words enough of a reason to buy the EV stock?

Image source: The Motley Fool.

2027 might be the year Tesla's financials get a meaningful boost Investors listen closely to what management teams discuss on company earnings calls. Musk seems to always give his shareholders a sense of optimism. This is particularly true of Tesla's full self-driving (FSD) and Robotaxi plans.

"I think probably unsupervised FSD or Robotaxi revenue will not be super material this year, but I do think it'll be material probably in a significant way next year," he mentioned on the most recent earnings call.

It's anyone's guess what a material effect translates to in a quantitative sense. As of March 31, Tesla counted 1.28 million FSD (supervised) subscriptions. Assuming all of these subscribers pay $99 per month for the service -- which isn't the case, as some paid a one-time fee upfront -- it brings in annual revenue of $1.5 billion, which is tiny.

The company's Robotaxi fleet was completing unsupervised rides in Austin, Dallas, and Houston in April. Its revenue is probably negligible at this point.

"We certainly hope to have unsupervised FSD or Robotaxi operating in, I don't know, a dozen or so states by the end of this year," Musk said on the call. This means progress must accelerate in 2027 to have a notable financial effect.

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Even though history paints a clear picture, the market has high hopes Tesla is a story stock. The market puts far more weight on the narrative surrounding the company -- that it's an AI-fueled self-driving and robotics lab -- than on its current state as an EV manufacturer with lower growth and pressured margins.

This shows up in the extreme valuation, with shares trading at a price-to-earnings ratio of 349. The investment community evidently believes that Tesla's FSD and Robotaxi capabilities will lead to robust financial success.

Anyone who follows this business knows that nothing is certain. This is especially true when trying to make timely predictions about the adoption curve of novel technologies. So, despite Musk's claim of a material financial effect in 2027, investors should practice caution when it comes to this Magnificent Seven stock.

According to a study by The New York Times, Elon Musk has achieved what he said he would only 19% of the time. It's hard to believe that this low hit rate will improve in the future.

As competition heats up and demand for electric vehicles (EVs) in the U.S. cools down, shares of Tesla (TSLA 0.28%) have unsurprisingly fallen more than 14% in 2026. Simultaneously, Tesla's self-driving capabilities have come under intense scrutiny for both safety reasons and the pace at which they're being rolled out. Is the dip in Tesla's price an opportunity to buy, despite these challenges?

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There is good news for Tesla's investors. Sales in Europe are rebounding, and the appetite for EVs abroad doesn't seem to be as sluggish as at home. Tesla's energy division, particularly in battery storage, is growing, and its revenue is likely to increase substantially in the coming quarters. Wall Street's consensus estimates suggest that the company's energy segment could generate $18.3 billion this year.

Between energy storage demand and a rebounding European market, momentum is building in Tesla's favor. The slowdown in the U.S. market could also be cyclical and due for a rebound, but that's still a risk.

Image source: Getty Images.

If Tesla goes the way of Ford Motor Company and General Motors by focusing more heavily on energy storage solutions, there's real money to be made in the short and intermediate terms, with potential for sustainable long-term growth on the other side. The incredible need for energy storage isn't slowing down. The energy storage market is expected to grow by nearly 22% year over year through 2033, according to market research firm Grand View Research.

Tesla's stock is still trading at a premium, even after the 14% dip. I believe Tesla Energy's potential justifies the inflated price, though, and this year's decline presents a compelling reason to buy.

Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.

Elon Musk is no longer a trillionaire. The world’s richest man had become the world’s first trillionaire after the record-setting IPO of Space Exploration Technologies (SPCX 1.88%) on June 12.

But a sell-off in SpaceX stock, combined with an even deeper drop in recent days in his other company, Tesla(TSLA 0.45%), pushed Musk back into the land of mere billionaires less than two weeks later. According to the Bloomberg Billionaires Index, Musk’s total net worth as of June 24 was $946 billion.

But don’t feel too bad for Musk -- he still has $650 billion more than Alphabet co-founder Larry Page, who is No. 2 on the list. And Musk has made $326 billion this year alone, which is more than the net worth of anyone else in the world.

Image source: The Motley Fool.

Odds are that Musk will regain his trillionaire status at some point. But in the meantime, the dip in SpaceX and Tesla warrants investigation. Are either of these stocks a buy now at reduced prices, or can investors expect even more volatility?

SpaceX is the biggest IPO in historySpaceX had a historic IPO this month. It sought to raise a record-setting $75 billion in its initial public offering and then topped that as underwriters exercised their “greenshoe” overallotment options, bringing the final figure to $85.7 billion. The company says it identified a total addressable market (TAM) of $28.5 trillion, with $26.5 trillion of that coming from AI.

SpaceX has three primary businesses. It’s perhaps best known for its rocket-launching business, which has so far completed more than 660 missions and deploys reusable rockets on most of them. Then there’s the Starlink satellite business, which is SpaceX’s only profitable venture to date. Starlink employs a network of more than 9,600 satellites in low-Earth orbit to provide mobile connectivity and internet access to rural and underserved communities.

AI, which includes the Musk-owned xAI that was absorbed by SpaceX earlier this year, is the most ambitious of the three businesses. It houses Grok, the company’s large language model and chatbot, and X, the social media platform formerly known as Twitter. The company lays out an ambitious plan to construct a vast AI computing infrastructure, starting on Earth but eventually extending into space.

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But it will be costly. Goldman Sachs, which was the lead underwriter for the SpaceX IPO, projects that the company will post a negative free cash flow of $105 billion in 2029 before becoming free cash flow positive by 2031.

The company also rattled investors this week when it announced a bond sale to raise money, despite having $100.8 billion in cash on hand. Published reports indicate that the company is looking to raise $20 billion through the sale. The stock fell more than 16% on the news.

SpaceX has a $2 trillion valuation, but it will take time for the company to turn a profit. Investors can expect a wild ride in the meantime.

Tesla wants to be more than an automakerMusk became a household name for his leadership of Tesla, which he grew into the world's largest automaker by market cap. Tesla helped popularize electric vehicles, and its stock grew rapidly from 2019 through 2023, with a five-year growth rate of 1,020%.

But 2024 and 2025 were not as kind. Competition grew stronger and margins tightened. Tesla sales fell in both 2024 and 2025, and while numbers rebounded in the first quarter of 2026, Tesla isn’t seeing the profit margins that it enjoyed just a few years ago.

However, Musk is turning Tesla’s attention to other ventures. It earned $2.4 billion in the first quarter from its energy generation and storage components, and it has a software business that sells full self-driving (FSD) and connectivity subscriptions to Tesla owners.

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Tesla is also working to make unsupervised FSD a reality -- and while the technology hasn’t been finalized or approved for nationwide use, Musk hopes to have it approved by the end of this year.

Finally, Tesla has an ambitious robotics program, with its first-generation line being developed at its Fremont, California, factory to produce up to 1 million Optimus robots per year. A second-generation line in Texas is also in development to produce 10 million robots annually. Musk has described the Optimus robots as assistants capable of completing everyday household tasks and operating in factories.

However, Tesla stock has underperformed the S&P 500 and is down 17% so far this year. A solid second-quarter report showing improved EV sales and margins would go a long way toward restoring investor confidence in the stock, but in the meantime, investors should view Tesla with some caution.

© 24/7 Wall St. / Getty Images

SpaceX (NASDAQ:SPCX) and Tesla (NASDAQ:TSLA | TSLA Price Prediction) sit on opposite sides of the same Elon Musk story. SpaceX debuted on June 12 and carries a $2.13 trillion market cap. Tesla closed Q1 FY2026 with $22.39B in revenue. The question is which grows faster from here.

Rockets Surge. Cars Carry the Quarter. Tesla’s earnings on April 22, 2026 showed the auto business clawing back margin. Automotive gross margin expanded to 21.1% from 16.2%, Non-GAAP EPS landed at $0.41 against a $0.3592 estimate, and Services & Other revenue jumped 42% YoY to $3.75B. Full Self-Driving subscriptions reached 1.28 million, up 51%. A real software flywheel is forming under the car business.

Energy is the soft spot. Generation and storage revenue fell 12% YoY, and operating expenses climbed 37% on AI R&D and CEO stock-based comp. Cash position is fortress-like at $44.74B.

SpaceX is the louder story. After IPOing at roughly $1.8T, shares have dropped 19.43% in one week to $154.54. Forward EPS sits at negative $0.69. Starlink revenue and launch cadence are the bull case. The bear case is the valuation itself.

Cash Machine vs. Capital Story Lens Company A Company B Core bet Autos, FSD, Optimus, energy Starlink, launch, defense Profit profile GAAP operating income $941M Negative forward EPS Key vulnerability Battery pack capacity ceiling Post-IPO lock-up overhang Sentiment Composite 60.97, bullish Composite 58.85, neutral The two companies are now financially intertwined. Tesla disclosed a $2B equity stake in SpaceX and a shared semiconductor fab project at the Gigafactory Texas campus. Owning one is partial exposure to the other.

The Next 12 Months Will Be Decided by Cash Flow and Lock-Ups For Tesla, catalysts are concrete: Cybercab volume production, Tesla Semi ramp, Megapack 3, and Robotaxi expansion into Phoenix, Miami, and Las Vegas. Watch whether FSD subscription growth and energy storage absorb the AI spending bulge.

For SpaceX, the watch list differs. Polymarket traders price a 97.9% probability SpaceX holds the higher valuation on June 30. The harder question is what happens after lock-ups expire. Reddit narrative inverted from “free money” to “institutional rejection” in roughly ten days.

Tesla’s 12-Month Edge vs. SpaceX’s Long-Horizon Story Models favor SpaceX on raw upside. The base case predicts 27.23% for SPCX versus 7.83% for Tesla over 12 months. Confidence levels diverge sharply. Tesla’s prediction carries 90% confidence; SpaceX sits at 50% with negative forward earnings.

For known cash flows, FSD attach rates, and a balance sheet that absorbs a recession, Tesla offers more visibility. For exposure to Starlink’s scale-up, SpaceX has wider distribution. SPCX faces a lock-up expiration overhang, while Tesla’s near-term catalysts center on Cybercab production. SpaceX’s float dynamics remain the key variable to monitor.

A Tesla electric vehicle is parked at a Tesla dealership, after Tesla, Inc. released its financial results for the first quarter of 2025, in Berlin, Germany April 23, 2025. REUTERS/Annegret Hilse Purchase Licensing Rights, opens new tab

CompaniesJune 25 (Reuters) - Tesla (TSLA.O), opens new tab said on Thursday ​that production at its Berlin plant ‌will rise by 20% to 7,500 vehicles per week from ​October this year.

Tesla said ​the planned increase in production ⁠means it will recruit ​a further 1,000 employees.

Stay up to date with the latest news, trends and innovations that are driving the global automotive industry with the Reuters Auto File newsletter. Sign up here.

The ​company already announced a capacity increase at the plant company in April to meet higher ​demand for the Model ​Y.

In May, it said it would ‌increase ⁠its investment in battery cell production at the plant.

The three announcements mean that a total ​of ​3,500 ⁠additional jobs will be created in the ​short and medium term ​for ⁠vehicle and battery manufacturing at the plant, the company ⁠said.

Reporting ​by Christoph Steitz, ​writing by Linda Pasquini, editing by ​Thomas Seythal and Friederike Heine

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Sunrun stock is building positive momentum. What’s pushing RUN stock higher? What Is Sunrun’s Virtual Power Plant Initiative?Tesla, Sunrun and Renew Home said Wednesday they plan to build a "virtual power plant" that coordinates home batteries, thermostats, water heaters and solar systems to reduce grid strain during peak demand. The companies said the effort could free enough electrical capacity to support the equivalent of 17 large data centers during those peak periods.

Sunrun also framed the opportunity as more than 16 gigawatts of flexible capacity for hyperscalers and utilities, aggregating millions of devices without new hardware and aiming to be deployable in months, not years. In Virginia alone, the group said it already has more than 300 megawatts available for immediate deployment, with a target of at least 500 megawatts by 2030.

Critical Price Levels To Watch For RUNThis news is landing while the stock is trying to extend a longer-term rebound (up 98.08% over the past 12 months), but it’s still working back from prior damage after breaking below support in June and printing a swing low in April. The current setup is constructive near-term: shares at $14.60 are trading 5.4% above the 20-day SMA ($13.85) and 8.1% above the 50-day SMA ($13.51), which typically signals buyers are defending pullbacks.

Momentum is improving using MACD as the main lens: MACD is above its signal line and the histogram is positive, which points to fading downside pressure versus the prior downswing. In plain terms, when MACD is above its signal line, it often means the recent trend is strengthening relative to the longer baseline.

The bigger technical "tell" is the mixed trend stack: the 20-day SMA is above the 50-day SMA (bullish), but the 50-day SMA remains below the 200-day SMA after the death cross in April (a longer-term caution flag). That leaves the stock in a recovery phase where rallies can still fail if it can’t reclaim longer-term reference levels.

Key Resistance: $16.50 — a nearby round-number zone that also sits close to the 200-day SMA ($16.54), making it a natural "prove it" level for the rebound Key Support: $12.50 — a nearby prior demand area that sits below the 20-day/50-day averages, where buyers previously showed up How Sunrun Operates in the Solar MarketSunrun is engaged in the design, development, installation, sale, ownership, and maintenance of residential solar energy systems in the United States. It acquires customers directly and through relationships with solar and strategic partners, then installs systems itself or via partners.

A key part of the model is long-duration customer relationships: many customers sign 20- to 25-year agreements to use Sunrun’s solar energy system, and the company often owns the installed systems. That matters for the AI-data-center angle because a virtual power plant depends on coordinating lots of distributed, already-installed home assets—exactly the kind of footprint Sunrun has been building.

Sunrun’s Benzinga Edge Scorecard BreakdownBelow is the Benzinga Edge scorecard for Sunrun, highlighting its strengths and weaknesses compared to the broader market:

Momentum: Bullish (Score: 80.72) — The stock is showing strong relative strength versus the broader market in the current tape. Growth: Bullish (Score: 94.16) — The company screens as growth-leaning versus peers, which can keep investors engaged even during choppy periods. The Verdict: Sunrun’s Benzinga Edge signal reveals a momentum-and-growth-driven profile, with both pillars scoring in the "strong" zone. For longer-term traders, that supports buying pullbacks into defined support, while treating the $16.50 area as the key level the chart needs to reclaim to improve the bigger trend picture.

RUN Stock Price Movement Thursday MorningRUN Stock Price Activity: Sunrun shares were down 4.44% at $13.78 Thursday morning, according to Benzinga Pro data.

Image: Shutterstock

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© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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The short answer to the headline question is "no," and the current price action is making that case more forcefully than any analyst or stock fanboy would.

Space Exploration Technologies (SPCX 1.27%), better known as SpaceX, priced its IPO at $135 per share on June 11, 2026, raising a record $87.5 billion and debuting on the Nasdaq exchange under the ticker SPCX. Within three trading sessions, the stock price had surged to $225 -- a 67% premium over the IPO price -- giving the company a market cap that briefly approached $3 trillion.

Then reality reasserted itself. As of Wednesday, June 24, SpaceX is trading near $156 a share, down roughly 31% from that peak in three days, erasing over $600 billion in market value. The stock is now trading just 15% above its IPO price, and the trajectory tells you something important about what investors actually bought.

Image source: Getty Images.

Before the stock ever opened, Morningstar ran a discounted cash flow analysis on the S-1 and arrived at a fair value of $63 per share -- roughly 55% below the IPO price. That's not a margin call. That's a fundamental disagreement about whether the numbers in the prospectus support any version of a $1.77 trillion company.

The S-1 data is unambiguous on one point: SpaceX generated $18.7 billion in revenue in 2025 while incurring nearly $5 billion in losses. In the first quarter of 2026 alone, operating losses were $1.94 billion on revenue of $4.69 billion. The only profitable segment is Starlink, which generated $119 million in operating income -- insufficient to offset the losses from the space operations and AI divisions combined. The xAI division, which SpaceX absorbed in an all-stock deal in February 2026, generated $818 million in Q1 revenue against $2.47 billion in operating losses. That is a business losing roughly $3 for every $1 it earns.

The xAI integration is the structural problem that no amount of Starship launch cadence solves in the near term. Morningstar assigned a 43% probability to a scenario in which SpaceX's orbital data center initiative fails to compete economically with terrestrial alternatives, which would produce capital losses exceeding $81 billion.

Grok, xAI's large language model, has not demonstrated measurable market share gains against OpenAI or Gemini. When SpaceX announced a $60 billion all-stock acquisition of AI coding start-up Cursor last week, the stock fell 20% over the next two days. Markets are not rewarding SpaceX's AI ambitions. Instead, they are increasingly penalizing them.

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The Tesla connection is a risk Investors who already own Tesla (TSLA +0.19%) sometimes view SpaceX as a complementary position in Musk's portfolio, reasoning that diversification across his ventures reduces single-name risk. The logic runs in reverse. Tesla and SpaceX are now positively correlated to the same sentiment cycle: When Musk-related risk rises -- whether from governance concerns, AI spending skepticism, or broader tech sell-offs -- both stocks move in the same direction. Adding SpaceX to a portfolio that already holds Tesla does not diversify the Musk variable. It concentrates it.

There is also a governance structure that deserves weight in any investment analysis. Elon Musk controls approximately 85% of SpaceX's voting power through dual-class shares. The $250 billion xAI acquisition and the subsequent $60 billion Cursor deal were both executed without independent fairness opinions -- a structural conflict of interest that experts have flagged explicitly in the S-1 analysis. Public shareholders cannot vote against future related-party acquisitions. They can only watch.

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What SpaceX actually does well None of this means SpaceX is a bad company. Starlink crossed 10 million subscribers in February 2026 and generated $4.42 billion in operating income for the full year of 2025. SpaceX captures roughly 85% of U.S. orbital launches and holds more than $24 billion in cumulative U.S. federal contracts. The launch business is real, competitively entrenched, and likely to remain so for the better part of a decade.

KeyBanc, in initiating coverage with a hold-equivalent rating, described SpaceX as positioned to maintain its leadership in space launch -- but concluded that this advantage is already priced into the stock.

That is precisely the problem. The parts of SpaceX worth owning are valued as if the parts losing billions will eventually justify the price. If you already hold Tesla and are watching SpaceX from the sidelines, the current pullback to the $150s from $225 might feel like a window of opportunity. It is more likely a preview of what happens when a company with $5 billion in annual losses and a $2 trillion market cap catches the same AI sell-off that took Nvidia down 8% and AMD down 14% in early June, except with a balance sheet that cannot absorb sentiment shifts the way those businesses can.

Space Exploration Technologies (SPCX 0.97%) successfully executed one of the largest IPOs in history on June 12. Even after a the stock tumbled this week, SpaceX's valuation is more than Tesla (TSLA 1.61%), another trillion-dollar business led by Elon Musk.

Last year, Tesla booked a $3.8 billion profit. SpaceX, meanwhile, recorded a $4.9 billion loss in 2025. From this perspective, Tesla may appear to be the superior investment. After all, why should investors opt for a money-losing business?

A deeper dive, however, reveals a more telling truth: Both companies trade at extremely high valuations. Even with positive profits, Tesla stock trades at more than 370 times earnings. The S&P 500, for comparison, trades at roughly 32 times earnings.

Why are both stocks trading at such nosebleed levels? The answer to this question reveals a lot about both businesses. It also provides an answer to which stock is better for investors in the long term.

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SpaceX and Tesla aren't that different after all Most investors think of Tesla as an electric vehicle stock. And that's true, at least in part. Last year, Tesla's Model Y was the second-best-selling passenger car in the world. Tesla's Model 3 also came in as one of the most popular sedans globally, electric or otherwise.

But Tesla's auto sales have been declining for several years. Last year, Tesla's auto sales fell by 8%. The year before, the company's auto sales slipped by 1%.

So yes, Tesla very much remains an EV producer. But with declining volumes, its status as an EV company hardly explains its $1.2 trillion market cap, which is higher than 370 times earnings.

SpaceX, too, is a curious case. The company itself claims that its total addressable market for rockets is only around $370 billion. Its satellite connectivity business, meanwhile, only has a total addressable market of $1.6 trillion. So even if SpaceX captured 100% of its long-term growth opportunities in these segments, that would only equate to around $2 trillion -- several hundred billion dollars less than the company's current market cap.

Image source: Getty Images.

The missing link is artificial intelligence. Both Tesla and SpaceX have essentially bet their entire business models on AI. Given that AI is one of the hottest areas of the market right now, investors are willing to pay top dollar for leading AI companies. That's true for Tesla even though its core legacy business is struggling. It's also true for SpaceX despite the company's lack of profitability.

"We believe we have identified the largest actionable total addressable market in human history," management said in SpaceX's IPO prospectus. More than 90% of its total addressable market isn't rockets or satellites, but AI, which is values at $26.5 trillion. Tesla, meanwhile, is chasing a $10 trillion market also based heavily on AI: robotaxis. "We think $8 trillion to $10 trillion for the entire autonomous taxi opportunity throughout the world, from almost nothing," Cathie Wood, CEO of Ark Invest predicts. "That's how quickly AI is going to cause these things to happen."

Which stock is better: SpaceX or Tesla? Surprisingly, both stocks face a very similar fate. If they fail at realizing their AI potential, both shares are likely a sell. If they succeed, it's possible there is plenty of upside to both stocks long term.

It's no wonder, then, that Musk is reportedly looking to merge Tesla and SpaceX. Betting markets currently predict a 51% chance of a merger by March of 2027. Even Musk's biographer is predicting a merger. "I think there will be a Tesla-SpaceX merger buyout, because it makes sense," Walter Isaacson recently told reporters.

Over the next 12 months, it may be moot whether Tesla or SpaceX is a superior stock pick. If betting markets and a growing number of experts are correct, we could see the two businesses become one fairly soon. Their shared AI ambitions are more than enough to justify a merger should regulators and shareholders approve.

Tesla shares TSLA remained under pressure on Wednesday as investors looked ahead to the electric vehicle maker's second-quarter delivery report while increasingly focusing on speculation surrounding a potential merger with SpaceX.

Tesla stock fell 1.8% to $374.69 after declining 5.8% in the previous session.

The shares have dropped nearly 13% in June and are down 4.7% since SpaceX began trading publicly on June 12, according to Dow Jones Market Data.

Tesla is expected to release its second-quarter vehicle delivery and energy storage deployment figures in early July.

According to FactSet, analysts expect the company to deliver approximately 401,120 electric vehicles during the quarter, representing a 4% increase from a year earlier.

However, investor attention appears to be shifting away from Tesla's traditional automotive metrics and toward broader strategic developments involving artificial intelligence initiatives and the possibility of combining Elon Musk's businesses.

Wall Street remains divided on Tesla's near-term delivery outlook.

JP Morgan analyst Rajat Gupta lowered his second-quarter delivery estimate to 420,000 vehicles from 430,500 units, although the revised forecast remains above consensus expectations.

If achieved, the total would mark Tesla's strongest quarterly delivery performance since the company delivered a record 497,099 vehicles in the third quarter of 2025.

Gupta pointed to "mixed recent signals" on electric vehicle demand in China and the United States as government incentives expire. However, he noted that Europe "remains the bright spot."

Recent registration data appears to support that assessment.

According to the European Automobile Manufacturers' Association, Tesla vehicle registrations in European markets more than doubled in May compared with the same period last year.

RBC Capital analyst Tom Narayan expects Tesla to deliver around 405,000 vehicles during the quarter.

However, he cautioned that the company's increased focus on robotaxis and humanoid robots could potentially weigh on demand for its privately owned vehicles.

Investors continue to view Tesla's artificial intelligence initiatives as central to the company's long-term growth story, with expectations that autonomous driving and robotics could create new sources of earnings beyond vehicle manufacturing.

A potential combination of Tesla and SpaceX has emerged as another major topic among investors.

Baird analyst Ben Kallo estimated second-quarter deliveries at around 392,900 vehicles but said recent attention has centered on the SpaceX initial public offering and the prospect of a merger between Musk's companies.

"We see this as likely to happen sooner rather than later," Kallo wrote on the business combination.

The analyst believes a merger could occur within the next 18 months, giving SpaceX time to integrate its recent merger with xAI and establish itself as a public company.

"We see the strategic rationale for a merger as clear and compelling with both companies benefitting from greater scale. Questions may arise regarding regulatory review; however, we do not expect significant scrutiny given limited overlap of end markets," Kallo wrote.

Meanwhile, Tesla is also facing legal scrutiny following a fatal crash in Texas involving one of its vehicles.

The family of a woman who died after a Tesla Model 3 crashed into a home last week has filed a lawsuit against both Tesla and the driver, alleging gross negligence and wrongful death.

According to the lawsuit, the vehicle was operating with an automated driving assistance system and "failed to detect the end of the street" before crashing into the residence.

The suit alleges Tesla should be held liable for defects in its driver-assistance systems and for failing to adequately warn consumers of potential dangers.

Chief Executive Elon Musk said in a post on X that "FSD drives slowly through neighborhood streets and this was a high speed crash," referring to Tesla's Full Self-Driving (Supervised) system.

Another company executive stated that the driver manually pressed the accelerator pedal, overriding the self-driving system.

The National Highway Traffic Safety Administration has launched a special investigation into the incident and is already conducting a separate investigation into possible defects in Tesla's Full Self-Driving technology.

As Tesla approaches its quarterly delivery report, investors are balancing near-term questions around vehicle demand with longer-term opportunities tied to artificial intelligence, autonomous driving, and the potential reshaping of Musk's corporate empire.