There is a particular kind of investor mistake that doesn't feel like a mistake while you're making it. You admire a company genuinely. You might like its engineering, its ambition, the degree to which it has embarrassed more complacent competitors, and that admiration quietly migrates into your portfolio. The two things feel related.
But they aren't. Respecting what a company has built and believing in its stock price are epistemically distinct judgments, and conflating them is how intelligent people end up holding expensive stories instead of businesses. That distinction is worth keeping in mind as we examine where Tesla (TSLA +1.38%) and Space Exploration Technologies Corp (SPCX +0.13%) actually stand.
Image source: Getty Images.
Tesla's valuation has lapped the business The operational backdrop justifies that skepticism. Full-year 2025 revenue fell 3% to $94.8 billion, the first annual revenue decline in the company's public history. Vehicle deliveries dropped 8.6% to 1.64 million units. Net income fell 61% in Q4 2025. Q1 2026 showed a genuine gross margin recovery to 21% -- that's real -- but operating income came in at $940 million on $22.4 billion in revenue, an operating margin of roughly 4.2%. For a company carrying a $1.2 trillion market cap, that number requires extraordinary future assumptions to justify. Not difficult assumptions. Extraordinary ones.
Those assumptions -- a dominant Tesla robotaxi network, Optimus humanoid robots at scale, an energy storage business compounding for a decade -- are not impossible. The problem is they aren't priced as possibilities. They're priced as certainties. At 180x trailing earnings, the market has assigned near-zero probability to execution risk, regulatory friction, competitive pressure from Waymo, or the plain fact that Tesla hasn't launched a new core vehicle in six years. The Cybertruck hasn't meaningfully expanded the addressable market. Full self-driving has been "almost ready" for long enough that the phrase has lost informational content.
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SpaceX: The lock-up is a problem SpaceX peaked at $225 per share within days of its June 12 debut then fell 31% in three trading sessions, closing at $154.60. Shares are currently up only 12% from the $135 IPO price -- and the structural mechanics suggest the downward pressure hasn't resolved.
The float situation is what most investors haven't modeled carefully. SpaceX's public float stands at roughly 4.2% of shares outstanding. Factor in earnings in early August, the 30% price-trigger unlocks, and a series of rolling 7% releases at 70, 90, 105, 120, and 135 days post-IPO. Some analysts estimate that up to 44% of insider shares could become tradeable by early September. That's a potential 900% expansion in the float over roughly 10 weeks. This isn't sentiment risk -- it's a supply shock with a calendar attached to it. The company also filed for a $20 billion bond issuance last week, suggesting that despite raising $75 billion at IPO, the balance sheet is already being leveraged toward xAI capital expenditures (capex).
Beneath all of that is what the S-1 actually disclosed: SpaceX's AI division generated $818 million in revenue against $2.47 billion in operating losses in Q1 2026 alone. Starlink remains the only segment generating meaningful profit. Morningstar's DCF model places fair value at $63 per share -- 58% below where the stock trades today -- under a base-case scenario. The gap between intrinsic value and market price isn't a "wait for growth to catch up" situation. It's a valuation that demands AI revenue scale from near-zero to several hundred billion dollars, at margins no AI company has sustained, on a timeline no technology business has achieved.
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My verdict Neither company is uninvestable in theory, over a sufficiently long horizon, under a sufficiently specific set of circumstances. But that framing is itself a trap -- and honestly, one I find myself impatient with. There's a pattern I'm seeing, subjectively: Elon Musk has become extraordinarily good at selling belief. His projects attract communities that function more like fandoms than shareholder bases, people who buy the stock the way others buy a band's merchandise, as an act of identity rather than analysis.
This isn't an insult; it's a remarkably powerful force that has minted real wealth for early believers. But it also means the gap between what these companies are worth and what they trade at isn't just a valuation discrepancy. It's a measure of how much pure enthusiasm has been priced in. Investing isn't about theoretical possibilities. It's about probability, price, and what you give up by holding something expensive while waiting for a story to earn its price tag.
At current prices, both Tesla and SpaceX ask you to pay for a future that may or may not exist, while the present makes a coherent case for patience. The honest answer, then, is no -- not at these prices, not with these fundamentals, and not in this environment.
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.
Lingyi iTech Guangdong rose in its Hong Kong debut after the Apple (AAPL) and Tesla (TSLA) supplier raised HK$8.3 billion, or $1.06 billion, in a share sale. Th
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.
Owning Tesla (NASDAQ:TSLA | TSLA Price Prediction) for the robotics story is now the dominant retail thesis: bulls argue Optimus and the Cybercab are option value the market has not paid for, and that the auto business is almost a free call on humanoid robots. The case has logic. Tesla is installing first-generation Optimus production lines at Fremont and a second-generation line at Gigafactory Texas, both designed to produce 10 million robots a year. The problem is structural. For a reader who wants exposure to robotics rather than a Tesla position, the Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ) already holds companies that ship robots and the chips that train them.
Why the Tesla robotics bet is expensive Tesla trades at a trailing P/E of 371 with a $1.43 trillion market cap. Optimus revenue today is effectively zero. The upside in robotics is priced into a multiple that already assumes execution. Q1 FY26 was a solid auto quarter, with revenue of $22.39 billion, up 15.78% year over year, and non-GAAP EPS of $0.41. However, the auto gross margin of 21.1% funds the robot program, but does not justify the multiple.
Prediction markets are skeptical of the near-term catalysts that would close the gap. Polymarket assigns a 13.5% probability to an Optimus release by year-end 2026 and a 2.8% probability to a California robotaxi launch by June 30. That means concentrated key-person, regulatory, and execution risk in a single stock that has already declined 15.14% year-to-date.
What BOTZ actually owns With 48 holdings and $3.54 billion in assets, this fund keeps a pretty tight roster. The top five weights are ABB at 10.5%, NVIDIA at 9.95%, FANUC at 9.69%, Keyence at 6.37%, and Daifuku at 5.27%. Intuitive Surgical comes in at 5.81%, and Cognex at 3.08%. Tesla? Nowhere to be found in BOTZ.
That basket maps to existing robotics revenue. NVIDIA (NASDAQ:NVDA) reported Q1 FY27 revenue of $81.62 billion, up 85.23% year over year, with Data Center revenue at $75.25 billion, up 92%. That is the compute backbone for every robotics program, including Tesla’s own Optimus training. ABB, the Swiss industrial robotics leader, has gained 88.52% over the past year. Intuitive Surgical (NASDAQ:ISRG) just posted 22.96% revenue growth with da Vinci procedures up 16% and Ion procedures up 39%. Cognex (NASDAQ:CGNX), whose machine vision systems sit inside production-line robots, has risen 115.92% over the past year, driven by 24.26% revenue growth.
The diversification mechanism The argument is the same one that pushes investors into a chip ETF rather than a single chipmaker. Whichever company eventually wins humanoid robots, the picks-and-shovels names (NVIDIA for compute, Cognex for vision, ABB and FANUC for industrial arms) get paid along the way. BOTZ captures that flow today rather than waiting on a single product launch.
The tradeoffs The expense ratio for this fund is 0.68%, which is not zero, unlike what you would pay for a direct Tesla position. The top names are also pretty concentrated, with ABB and NVIDIA together accounting for more than 20% of assets, so this is not exactly a pure humanoid play. Short-term performance has been modest too, with the fund up just 1.13% year to date and 20% over the past year. A single positive Optimus demo could send Tesla up double digits in a single session and make BOTZ look like it is standing still.
For taxable accounts, selling Tesla after holding it for a long time would trigger capital gains. A partial swap, sizing BOTZ to the robotics conviction the reader actually has while keeping a residual Tesla position for the auto and Optimus optionality, may be more tax-efficient than a full exit.
What this changes for a Tesla holder If the reason for owning Tesla is the car company plus full self-driving (FSD), with active subscriptions reaching 1.28 million, up 51% year over year, the position still makes sense on its own terms. If the reason is robotics specifically, paying 378 times earnings for zero current robotics revenue is a steep way to access a theme already represented in a diversified ETF. BOTZ is the cleaner expression of that thesis, with the tradeoff that the upside is spread across many names rather than concentrated in one.
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.
Tesla (TSLA - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this electric car maker have returned -15.2% over the past month versus the Zacks S&P 500 composite's -1.4% change. The Zacks Automotive - Domestic industry, to which Tesla belongs, has lost 10.1% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Tesla is expected to post earnings of $0.45 per share for the current quarter, representing a year-over-year change of +12.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.6%.
The consensus earnings estimate of $1.99 for the current fiscal year indicates a year-over-year change of +19.9%. This estimate has changed -1.2% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $2.56 indicates a change of +28.5% from what Tesla is expected to report a year ago. Over the past month, the estimate has changed -0.4%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Tesla.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Tesla, the consensus sales estimate of $24.32 billion for the current quarter points to a year-over-year change of +8.1%. The $101.11 billion and $113.42 billion estimates for the current and next fiscal years indicate changes of +6.6% and +12.2%, respectively.
Last Reported Results and Surprise HistoryTesla reported revenues of $22.39 billion in the last reported quarter, representing a year-over-year change of +15.8%. EPS of $0.41 for the same period compares with $0.27 a year ago.
Compared to the Zacks Consensus Estimate of $21.92 billion, the reported revenues represent a surprise of +2.12%. The EPS surprise was +13.89%.
Over the last four quarters, Tesla surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Tesla is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Tesla. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
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's (TSLA 0.28%) market cap is currently hovering around $1.2 trillion. Over the last three years, shares have soared by more than 50%.
What many investors may not realize, however, is that Tesla's auto sales are actually declining. Last year, Tesla's auto sales fell by 8%. In 2024, auto sales were down by around 1%.
Tesla's core auto manufacturing business is by no means cratering. But it does raise the question: Why are shares doing so well despite declining sales in its biggest business segment?
The answer to this question is undoubtedly artificial intelligence. Autonomous driving is increasingly made possible by rapid advancements in AI. This is allowing Tesla to target new growth opportunities with higher growth rates and superior margins than conventional auto sales. Some experts believe that the robotaxi market, for example, will grow into a $10 trillion industry worldwide over the long term.
"We think $8 trillion to $10 trillion for the entire autonomous taxi opportunity throughout the world, from almost nothing," predicts Cathie Wood, the CEO of Ark Invest, a major Tesla shareholder. "That's how quickly AI is going to cause these things to happen."
Tesla's pivot from carmaker to AI company has already been rewarded heavily by the market. But one EV stock isn't getting the same premium despite its new focus on AI. Growth investors could be getting a bargain.
Image source: Rivian.
This Tesla competitor looks way too cheap Rivian's (RIVN +1.43%) $19 billion market cap pales in comparison to Tesla's $1.2 trillion valuation. But in many ways, the companies are pursuing the same growth path.
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Both Tesla and Rivian are, of course, manufacturers of electric vehicles. And following the launch of Rivian's R2 model, both companies now produce at least one vehicle with a starting price tag under $50,000.
Both companies are also going all-in on AI.
"We believe [Tesla] will aggressively bring capacity online to enable AI-driven learning cycles on product design, manufacturing processes, and software integration into products," explains Colin Rusch, an analyst at Oppenheimer. So it's not just self-driving robotaxis that AI will make possible for Tesla.
Rivian, meanwhile, announced a major strategic shift last December, one that will see the company significantly increase its investments in AI, to the point that Rivian no longer expects to be profitable in 2027. "We believe autonomy will be a key fundamental long-term differentiator for our business," Claire McDonough, Rivian's CFO, stressed in February.
Tesla enjoys many advantages that Rivian lacks. It has brand name recognition, an influential CEO in Elon Musk, and a sizable capital advantage. But Rivian's stock price arguably reflects those disadvantages more than it should. Shares trade at just 3.3 times sales, versus Tesla's 13.8 times sales. Plus, experts expect Rivian to grow its sales by 31% this year, with another 64% growth expected in 2027. Tesla's sales, meanwhile, are projected to grow by just 8% this year, with 16% growth expected in 2027.
To be fair, there are also differences in each company's approach to AI and autonomy. Tesla has already established its own robotaxi service in several metro areas of Texas. Musk has teased rapid expansion, but some reports suggest that Tesla's robotaxi fleet is actually shrinking. Rivian, meanwhile, has positioned itself as a supplier to the robotaxi versus a direct competitor. Earlier this year, it agreed to sell up to 50,000 R2 SUVs to Uber Technologies in a $1.25 billion deal. Uber is expected to use the vehicles for its own robotaxi fleet.
I previously speculated that as the robotaxi market heats up, more robotaxi operators will seek supply deals from Rivian. That's because many robotaxi competitors, while backed by big-tech budgets, don't produce their own vehicles. Therefore, these operators need to source vehicles from third-party suppliers to grow.
It's unclear when the market will wise up to Rivian's potential. It may take a few years for actual underlying growth to buoy the stock's struggling valuation. But for patient investors, few growth stocks look as attractive as Rivian right now.
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.
Tesla (NASDAQ:TSLA | TSLA Price Prediction) has been one of 2026’s most-debated stocks, swinging between SpaceX-merger fever and valuation skepticism. After running the numbers, our 24/7 Wall St. price target lands almost exactly where shares trade today, with a modest single-digit upside that earns a buy rating but stops well short of a table-pounding call.
Tesla closed at $375.53 on June 24, 2026. Our 24/7 Wall St. price target for Tesla is $404.94, implying 7.83% upside over the next 12 months. We rate the stock a buy with high confidence, but call this a fair-value setup rather than a deep discount.
24/7 Wall St. Price Target Summary Metric Value Current Price $375.53 24/7 Wall St. Price Target $404.94 Upside 7.83% Recommendation BUY Confidence Level 90% A Rough Six Months Sets the Stage Tesla has cooled meaningfully in 2026. Shares are down 16.5% year to date, off 11.85% over the past month, and sit roughly 16% below the $498.83 52-week high (low of $288.77).
Yet fundamentals are improving. Q1 2026 delivered $22.39 billion in revenue, up 15.8% YoY, with non-GAAP EPS of $0.41 beating consensus by 17.78%. Automotive gross margin expanded to 21.1% from 16.2%, FCF climbed 117.47% to $1.44 billion, and active FSD subscriptions hit 1.28 million, up 51% YoY.
The Case for $475 and Beyond Bulls have a real story. Management committed to over $25 billion in 2026 CapEx to fund Cybercab, Tesla Semi, Megapack 3, the Optimus ramp, AI5 silicon, and the new semiconductor research fab in Austin. CFO Vaibhav Taneja called it the “right strategy to position the company for the next era.” Barclays has an equal weight rating on the shares with a $360 price target.
Elon Musk argued Optimus could be “the biggest product ever” and guided unsupervised FSD for customer cars by Q4 2026. Wall Street’s average analyst target sits at $421.16, with 23 Buy ratings against 7 Sells. Our bull-case scenario gets shares to $475.30, a 26.57% return, if Cybercab, Robotaxi expansion, and Optimus convert the AI narrative into revenue.
What Could Go Wrong The bear case starts with valuation. Tesla trades at a 344 trailing P/E and 192 forward P/E, with a PEG of 5.45. Energy revenue fell 12% YoY, opex jumped 37%, and management openly guided for negative free cash flow the rest of 2026. Insider direction is net selling on 49 recent transactions.
Counterfactually, the opex spike reflects AI5 chip development and the CEO award SBC, both arguably investments in long-duration optionality rather than operating decay. Still, our bear scenario maps to $354.33, a 5.65% drawdown.
The Bottom Line: A Fair-Value BUY My 24/7 Wall St. price target of $404.94 reflects a stock priced almost exactly where the fundamentals justify, with our 247Factor providing the tiebreaker. The bull thesis depends on Cybercab volume production and FSD revenue inflecting in late 2026 as guided.
The bear case hinges on the $25 billion CapEx cycle pressuring margins faster than AI revenue can offset. With 90% confidence, this is a modest buy, not a conviction call.
Year 24/7 Wall St. Price Target 2026 $404.94 2027 $430.45 2028 $457.55 2029 $483.20 2030 $509.74 These projections assume Tesla executes the Cybercab, Optimus, and FSD roadmap on management’s timeline. Significant upside or downside could come from China FSD approval, the SpaceX equity relationship, or a sharper-than-expected demand softness in the core auto business.
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.
Key Takeaways Sweden's TRV asked the EU to reject broader FSD deployment over automated speeding concerns.Regulators also flagged winter-road performance and the Full Self-Driving name.TSLA won Dutch approval in April, with rollout reaching several European countries. Tesla, Inc.’s (TSLA - Free Report) Full Self-Driving (FSD) system recently gained access to public roads in the Netherlands, marking its first approval in Europe and fueling expectations of a broader rollout across the continent. However, not all countries support the expansion. Sweden’s Transport Administration (TRV) has urged the European Union to reject the wider deployment of FSD in its current form.
A key concern for Swedish regulators is Tesla’s “Speed Offset” feature, which allows FSD-equipped vehicles to travel above posted speed limits, per Reuters. While similar functionality exists in conventional cruise-control systems, regulators argue that the risks are greater when the feature is integrated into an automated driving system. In a letter to the EU’s Technical Committee on Motor Vehicles (TCMV), the TRV warned that permitting automated systems to exceed legal speed limits routinely could undermine traffic laws and reduce the intended safety benefits of vehicle automation.
Beyond the speed-related issue, European authorities have also raised concerns about FSD’s performance in challenging winter conditions, particularly on snow-covered roads, as well as the potentially misleading nature of the “Full Self-Driving” name. These concerns come as the TCMV prepares to vote on June 30 on whether to extend the Dutch approval across the European Union.
The TRV does not have the authority to determine Sweden’s position in the European committee vote. That role is held by the Swedish Transport Agency (STA), which acts as the nation’s vehicle type-approval authority.
Per Reuters, the STA has been engaged in discussions with both Tesla and the Dutch road authority, RDW, regarding the matter. One reported meeting between Tesla and regulators lasted about two hours on June 4. Per the STA, talks are still ongoing. While the agency has not yet disclosed how Sweden intends to vote, it noted that the concerns highlighted by the Transport Administration continue to be considered as part of its assessment process.
Despite the opposition, Tesla achieved a significant milestone when Dutch regulators approved FSD for use on public roads in April. Since then, the technology has also been introduced in Belgium, Denmark, Lithuania and Estonia, while approval remains under review in Greece. Although Greek officials criticized Tesla for relying on North American data, they acknowledged that FSD could potentially lead to a substantial reduction in traffic accidents.
Tesla maintains that the Speed Offset feature does not compromise safety because drivers remain responsible for the vehicle and can intervene at any moment. Swedish regulators, however, believe this safeguard is insufficient to address the risks associated with automated speeding.
The European version of FSD already differs from the U.S. version. Instead of driving profiles such as “Sloth” and “Mad Max,” European users can adjust settings through “Max Speed” and “Max Speed Offset” options. The system also handles uncertain speed limits differently, displaying an estimated limit accompanied by a question mark when it lacks definitive information. Additionally, the interface labels the system as “FSD (Supervised)” rather than “Full Self-Driving,” likely to reduce the possibility of drivers misunderstanding the technology’s capabilities.
TSLA’s Zacks Rank & Key PicksTesla currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Geely Automobile Holdings Limited (GELHY - Free Report) , Douglas Dynamics, Inc. (PLOW - Free Report) and Garrett Motion Inc. (GTX - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GELHY’s 2026 sales and earnings implies year-over-year growth of 77.1% and 40.3%, respectively. The EPS estimate for 2026 and 2027 has improved 18 cents and 7 cents, respectively, over the past 30 days.
The Zacks Consensus Estimate for PLOW’s 2026 sales and earnings implies year-over-year growth of 16.7% and 31.4%, respectively. The EPS estimate for 2026 and 2027 has improved 39 cents and 29 cents, respectively, over the past 60 days.
The Zacks Consensus Estimate for GTX’s 2026 sales and earnings implies year-over-year growth of 5.6% and 20.4%, respectively. The EPS estimate for 2026 has improved 12 cents over the past 60 days, while the EPS estimate for 2027 has improved a penny over the past 30 days.
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.
During Micron’s fiscal third-quarter earnings call, CEO Sanjay Mehrotra outlined a long-term vision in which humanoid robots become a significant new market for memory and storage, making a striking comparison with today’s vehicles.
“Humanoid robots carry 10 times the amount of memory as an average L2+ vehicle,” Mehrotra said. “We expect a sustained, substantial multi-decade memory demand cycle to begin in the latter part of this decade.”
While Micron did not mention Tesla specifically, the comments come as Tesla continues to position Optimus as one of its biggest long-term growth opportunities.
Tesla Optimus Could Reshape AI Memory DemandThe comparison underscores how memory-intensive humanoid robots could become as they process real-time vision, perform inference, and plan motion.
According to Mehrotra, continued advances in simulation, foundation models and integrated hardware and software are accelerating the development of physical AI, creating “a growing content-rich opportunity for high-bandwidth, low-power memory and storage that powers real-time perception, inference, and control.”
If Tesla succeeds in deploying Optimus at scale across factories and eventually commercial markets, each robot could require substantially more advanced memory than today’s driver-assistance-equipped vehicles, potentially creating a new source of demand for suppliers like Micron.
AI Infrastructure Extends Beyond GPUsMicron’s broader message was that the AI infrastructure story is expanding beyond graphics processors.
“AI system performance is architecturally dependent on memory subsystem performance and capacity,” Mehrotra said, adding that memory has become “a strategic asset” in the AI era.
The company believes AI-driven demand is outpacing the industry’s ability to add new supply, with Micron now expecting tight memory market conditions to persist beyond calendar 2027.
“We currently do not have line of sight as to when memory supply will be able to catch up with increasing demand,” Mehrotra said.
Photo: Around the World Photos/Shutterstock
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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.
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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
Shares of Tesla (TSLA) have been largely rangebound for the past year as investors weigh current fundamentals to future prospects. Rick Ducat outlines the stock's "bumpy road" along with key support and resistance areas to watch.
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.
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The Trump administration’s Department of Transportation (DOT) has proposed new changes to federal vehicle regulations that would allow companies to skip including brake pedals in “vehicles designed to be driven exclusively by automated driving systems.”
The proposal, if adopted, would remove a major regulatory barrier for companies like Tesla and Zoox, which are developing vehicles intended to be fully autonomous, without a steering wheel or pedals. The public will now have 30 days to comment on the proposal before the DOT decides whether to approve the changes.
This is the latest of a series of proposed changes to vehicle laws from the Trump DOT. Late last year, the National Highway Traffic Safety Administration (NHTSA) proposed removing a number of Federal Motor Vehicle Safety Standards (FMVSS) requirements around windshield wiping and defogging systems, and tire placards.
President Biden was also working in this direction while in office. During his administration, the NHTSA proposed and ultimately finalized a rule that allowed autonomous vehicles to operate without steering wheels.
Currently, any company developing an autonomous vehicle that is missing parts required by the FMVSS has to request an exemption from the federal government. Even if the exemption is granted, regulations restrict how many such exempted vehicles can be on the road.
Removing requirements for parts like brake pedals will theoretically allow companies to get autonomous vehicles on the road quicker, according to the NHTSA.
“We are at the cusp of the greatest technological revolution in vehicle technology since the innovation of the Model T,” NHTSA Administrator Jonathan Morrison said in a statement. “If we want America to lead the way, we have to reimagine our regulatory framework. That’s why under Secretary Sean Duffy’s AV Framework, NHTSA is tearing down pointless barriers to innovative designs while strengthening the fundamental safety requirements that matter and holding AV developers accountable for safe performance.”
Tesla has spent the last few years developing a two-seater car it calls the Cybercab that is intended to operate without a steering wheel or pedals. The company has never applied for an exemption to the FMVSS standards requiring those controls. Instead, CEO Elon Musk has repeatedly said that his company would deploy the vehicles nationwide once regulatory approval was granted.
In the meantime, Tesla has spent the last year operating a small robotaxi service in Austin, Texas. The company began the service with safety drivers in the front seats, but has steadily removed those drivers, leaving the cars to operate “unsupervised.” The company has admitted to the NHTSA that it is using teleoperators to monitor and, in some rare cases, move the vehicles remotely at low speeds after crashes or to avoid obstacles.
Zoox, which is owned by Amazon, applied for and was granted an exemption from FMVSS standards last year so it could demonstrate its purpose-built robotaxi. The company has since applied for, and is waiting on, another exemption to operate that robotaxi commercially.
Companies like Waymo, which use retrofitted or modified versions of regular vehicles (such as the Jaguar I-Pace), have been able to deploy as many robotaxis as they want since they already have manual controls.
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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.
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.
Gary Black Dismisses ‘Absurd’ ArgumentIn a post on X on Thursday, Black rubbished the idea that Musk was slowing down Tesla’s Robotaxi ramp on purpose. The investors said that arguments saying “Elon is holding back TSLA’s robotaxi scale-up so $SPCX can buy $TSLA at a relatively cheap valuation” were “absurd.”
The investor pointed towards “massive dilution” that would result from the transaction, given valuation concerns with both the commercial space flight giant and Tesla. Black also outlined “the governance issues” that could arise due to the strategy.
“We remain cautious on $TSLA due to declining earnings estimates, the coming commoditization of unsupervised autonomy, and a seemingly extended valuation,” the investor said.
Tesla Texas Crash, PR WoesThe driver of the vehicle claimed that the vehicle was on Autopilot, according to local law enforcement officials, something which Musk denies. However, both the National Highway Traffic Safety Administration (NHTSA) and the National Transportation Safety Board.
Zoox RobotaxiAccording to Benzinga Edge Rankings, Tesla provides excellent Growth, but fails to provide a favorable price trend in the Short, Medium and Long term.
Price Action: Tesla shares were down 1.31% to $376.60 during premarket trading on Thursday
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
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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 (TSLA, Financials) is facing a wrongful death lawsuit after a fatal crash in Texas. The family of 76-year-old Martha Avila says a Tesla crashed into her h
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.
Elon Musk was no longer a trillionaire by the time markets closed on Wednesday. Plunging shares in Tesla and SpaceX dragged the tech magnate down to billionaire status. As of 4pm ET, Forbes listed Musk’s net worth as $970.2bn.
Musk reached trillionaire status on 12 June after SpaceX’s historic initial public offering. The rocket, satellite and AI company’s debut on the stock market made Musk the first person with a net worth of more than $1tn. His fortune continued to hover around that gigantic figure in the weeks following the initial public offering (IPO).
A global stock selloff this week led to sharp declines for major tech stocks and dealt a blow to Musk’s wealth, however, as investor concerns that the Federal Reserve will potentially raise interest rates and looming fears of an AI bubble rattled the market.
Companies whose values were heavily linked to the AI boom, including Google’s parent, Alphabet, and chipmakers such as Samsung, were hit especially hard.
The SpaceX IPO, the largest in history, immediately vaulted Musk’s wealth while also tying it to the company’s stock price. SpaceX raised $75bn from its record-breaking IPO and its stocks increased by 19%, from its initial price of $135 per share, within 24 hours of going public. On Wednesday, SpaceX’s stocks were listed at $154.35.
Most of Musk’s wealth is tied up in stock and equity, and is not cash he can quickly spend. Still, his fortune is unprecedented, not just for its size but the speed at which it grew.
Market fluctuations mean it is possible that Musk could regain his trillionaire status in the near future if either Tesla or SpaceX shares rebound.
Although no longer a trillionaire, Musk is easily still the world’s richest person. The next wealthiest billionaire is the Google co-founder Larry Page, whose net worth is about $284bn, according to Forbes.
Musk made more money than Page’s entire fortune this year alone, increasing his net worth by $338bn since January.
Accounting for markets being closed on Friday, June 19, in observance of the Juneteenth holiday, Space Exploration Technologies (SPCX 0.97%) has just five trading days under its belt, but that's enough time for an array of exchange-traded funds (ETFs) to have gotten involved with the stock.
Just five days after the largest initial public offering (IPO) in history, 28 ETFs feature Elon Musk's reusable rockets company among their top 15 holdings. The leader of that pack is the Baron First Principles ETF (RONB +0.47%), which, as of June 17, had a 31.2% weight to SpaceX, or more than double the allocation to the fund's second-largest holding.
This ETF has a substantial stake in SpaceX stock. Image source: Getty Images.
The $238.5 million Baron ETF debuted last December, and SpaceX is obviously a new stock, so the jury is still out on whether this is one of the best ETFs that hold SpaceX, performance-wise. Still, with that hefty weight to the hottest name in space equities, the fund is useful for investors who want exposure without an all-in commitment. If there's a rub, it's an annual fee of 1%, or $100 on a $10,000 investment. That's very high compared to many ETFs.
History and housekeeping It's unusual for a single stock to command nearly a third of an ETF's portfolio, so it's worth examining how and why SpaceX looms so large in the Baron fund. For starters, it must be noted that this is an actively managed fund, so the managers can make large, concentrated bets if they see fit. Conversely, the passive broad-market ETFs that add the satellite stock will wait for SpaceX's market cap to rise before the shares command larger percentages of their portfolios.
History also helps explain why this ETF holds such a sizable stake in SpaceX. Ron Baron, the founder of the firm, is a friend of Musk's and has long put his money (and clients' money) where his mouth is. The money manager first invested in SpaceX in 2017, when the company was valued at just $22 billion, and subsequently participated in 27 capital raises. Baron Capital threw another $1 billion at the stock on IPO Day.
The Baron First Principles ETF isn't the firm's only ETF with SpaceX exposure. Another pair of the firm's actively managed ETFs is among the top nine ETF holders of the space stock.
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Baron himself is overtly bullish on SpaceX. He sees the company's market value rising to $20 trillion and beyond a decade out, implying exponential appreciation from the current level of $2.2 trillion. If that prediction is anywhere close to accurate, investors who deploy this ETF stand to benefit.
Don't forget the Tesla angle Leading up to and immediately following the SpaceX IPO, there's been plenty of chatter about that company potentially acquiring Tesla (TSLA 1.61%). There are no guarantees that the transaction will occur, but more than 40% Kalshi traders are betting it could be announced in March, April, or May of 2027.
Speculation about a SpaceX/Tesla marriage is relevant to discussing the Baron ETF because Musk's electric vehicle company is the fund's second-largest holding, accounting for almost 12% of the portfolio.
Interestingly, Baron's affinity for Musk-backed companies started with Tesla, as he invested in the company in 2014 and 2016. While Baron reduced client holdings in Tesla, it's estimated 40% of personal net worth is tied to that stock.
Putting it all together, this ETF is a highly concentrated bet on two Musk stocks. Most ETFs don't assign 40%-plus of their weights to just two companies so investors seeking a diverse roster may want to take a pass on the Baron ETF. On the other hand, risk-tolerant market participants that want to double-dip with Musk's two public companies without owning either outright may want to give this fund a closer look.
Shares of Tesla Inc. NASDAQ: TSLA are down about 15% from the May high and are starting to take a shape that investors won't want to see. The broader narrative around the company has been getting more interesting by the month, from the Wall Street hype around the company’s full self-driving (FSD) and robotaxi projects to the increasingly serious conversation about a Tesla and SpaceX NASDAQ: SPCX merger.
Tesla Today
$373.56 -8.05 (-2.11%)
As of 03:17 PM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$288.77▼
$498.83P/E Ratio342.39
Price Target$405.06
However, this week has brought a much less welcome development, and it's the kind of headline that could easily further darken sentiment in the short term. It was announced on Monday, June 22, that the National Highway Traffic Safety Administration (NHTSA) has opened a fresh probe into Tesla after one of its Model 3 vehicles crashed into a residential home in Texas, causing a fatality.
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The fact that this is simply the latest in a long line of regulatory investigations into Tesla will be concerning for investors, and it’s the last thing the stock needed. The main question is how much weight to put on it.
What the Probe Is Actually AboutThe NHTSA's investigation centers on a fatal crash in Katy, Texas, where a Tesla Model 3 struck a residential home and caused a fatality. The agency has opened what it calls a special crash investigation, the same type of inquiry it has used dozens of times over the past decade to look into Tesla incidents involving its driver-assistance technology.
The early commentary from Tesla itself is interesting. CEO Elon Musk publicly suggested that the high-speed nature of the crash didn't fit Tesla's typical FSD profile, which is designed to operate at much lower speeds on neighborhood streets.
There is, of course, the possibility that the driver had manually overridden the system at the time of the crash. Still, regardless of what actually happened, the optics are not good. These things take time to resolve, and until they are, those headlines are the kind that spook investors, big and small alike.
Why This Stings, Even If It Shouldn'tThe NHTSA has been ramping up its scrutiny of Tesla's FSD in recent months, and the broader regulatory backdrop hasn't been getting easier. This ongoing pattern of regulatory investigations has been a slow drip of negative sentiment, clearly wearing on the stock.
The real kicker for investors is the timing of this latest probe. Tesla had been trying to put together a fresh uptrend after a difficult start to the year, and the broader bull case around AI, robotics, and the SpaceX merger thesis had been steadily attracting fresh interest.
However, the stock is currently 15% off its May high and in danger of forming a clear downtrend. The frustrating reality for long-term bulls is that the underlying business story hasn't actually changed. Stocks like Tesla, however, trade on narrative as much as on numbers, which makes them particularly vulnerable to this kind of situation.
Tesla, Inc. (TSLA) Price Chart for Wednesday, June, 24, 2026
The Bigger Picture Still HoldsThat said, those of us with a long enough time horizon need to keep this firmly in perspective. As we highlighted recently, the most important conversation around Tesla right now isn't about Model 3 safety records. It's about whether the company is on the verge of one of the most consequential corporate combinations in history. Wedbush's Dan Ives recently put the odds of a Tesla-and-SpaceX merger within the next year at 80%, and SpaceX's recent IPO has turned that conversation from theoretical to very real.
In that context, a single NHTSA probe, even one that grabs headlines, doesn't materially alter the long-term story. FSD remains a key pillar of Tesla's valuation, but the broader thesis now spans robotaxis, Optimus, energy storage, and the prospect of integration with SpaceX's AI and satellite ecosystem. Investors with conviction in the bigger picture are unlikely to be shaken loose by a single regulatory headline, however tragic or serious it may sound on the surface.
It’s Easier to Remain BullishSure, the short-term picture is a little uncomfortable, and there's a chance things get worse before they get better, especially given how weak the stock has been trading in recent weeks. The lack of a clear catalyst isn’t helping, and the company’s next earnings report isn’t due for another month.
But for investors who believe in where Tesla is ultimately headed, this kind of pullback is more likely to look like a bit of noise than not. The stock has been here before, and every previous regulatory wobble has eventually given way to the bigger story that’s constantly evolving within Tesla. Until then, patience remains the price of admission, and for those willing to pay it, the potential reward keeps growing.
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People visit a Tesla service center and gallery in Austin, Texas, U.S., June 21, 2025. REUTERS/Joel Angel Juarez/File Photo Purchase Licensing Rights, opens new tab
SummaryCompaniesModel 3 driver used Autopilot before crash, lawsuit saysSeventy-six-year-old grandmother pinned in her home, later diedNHTSA has probed dozens of Tesla crashes linked to driver assistanceTesla unavailable for comment, has said driver drove fastJune 24 (Reuters) - Tesla (TSLA.O), opens new tab has been sued by the family of a 76-year-old Texas grandmother killed last week when a driver using his Model 3's automated driving assistance system crashed into her suburban Houston home, the family's lawyers said.
According to a complaint filed on Tuesday, Elon Musk's electric vehicle maker should be liable for the wrongful death of Martha Avila, reflecting its gross negligence and failure to warn that its Autopilot and Full Self-Driving systems were defective.
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Avila's daughter, Jennifer Barbour, and her husband, Justin Barbour, said the Model 3's driver, Michael Butler, told law enforcement he engaged Autopilot before plowing through the front wall of Avila's home in Katy, Texas, on June 19, pinning her.
She died later at a nearby hospital, the complaint said. Justin Barbour said he was also injured.
The lawsuit filed in a Harris County, Texas, state court seeks more than $1 million in damages, and punitive damages reflecting Tesla's alleged "reckless disregard for a substantial risk of severe bodily injury."
Tesla and Musk did not immediately respond to requests for comment.
Musk, the world's richest person, posted on X on Monday night: "FSD drives slowly through neighborhood streets and this was a high speed crash!"
Ashok Elluswamy, vice president of AI software at Tesla, posted separately on X that "the driver manually overrode self-driving by pressing the accelerator all the way to 100% of the accel pedal in this residential area."
DOZENS OF TESLA PROBESThe National Highway Traffic Safety Administration has been investigating the crash.
It has since 2016 opened nearly 50 special investigations of Tesla crashes believed to involve advanced driver assistance systems. About two dozen deaths were reported.
In March, the NHTSA escalated its probe into 3.2 million Teslas equipped with Full Self-Driving, on concern the system may fail to detect or warn drivers in poor visibility.
And in 2023, Tesla recalled about 2 million vehicles, nearly all of its electric vehicles on U.S. roads, to better ensure that drivers pay attention when using Autopilot.
Tesla has said Autopilot enables vehicles to steer, accelerate and brake within their lanes, while Full Self-Driving lets vehicles obey traffic signals and change lanes.
The automaker has also said both technologies require "fully attentive" drivers whose hands are on the wheel.
Butler is also a defendant in the Barbours' lawsuit. It is unclear whether he has a lawyer. Efforts to reach him were not immediately successful.
The Barbours' lawyers did not immediately respond to requests for additional comment.
Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles., opens new tab
At $381.61, Tesla (NASDAQ:TSLA | TSLA Price Prediction) looks vulnerable, with a credible path toward the $190 historical manufacturing support zone as tech multiples compress and global EV pricing grinds margins lower. The stock just slid 5.79% in a single session, and the bid under the chart looks thinner by the week.
Tesla remains the world’s most recognized EV maker, but the business spans energy storage, FSD subscriptions, robotaxis, and Optimus. That optionality supports a $1.52 trillion market cap on $1.09 of trailing EPS. The auto core fights BYD and Chinese OEMs on price, and recent margin recovery leaned on one-time warranty and tariff benefits.
Why Bulls Still See a Floor Here Q1 2026 EPS came in at $0.41 versus a $0.36 estimate, automotive gross margin expanded to 21.1% from 16.2% YoY, and free cash flow jumped 117.47% year over year to $1.44 billion. Cash sits at $44.74 billion against minimal debt.
FSD subscriptions hit 1.28 million, up 51% YoY, and Services revenue grew 42% YoY to $3.75 billion. Cybercab, Semi, Megapack 3, and Optimus all target volume production in 2026. The analyst consensus target of $420.55 implies upside, and 23 buy ratings outnumber sells more than three to one.
Why the Bear Case Is Tightening Valuation is the core problem. Trailing P/E sits at 371 and forward P/E at 204, on a 3.95% net margin business whose full-year 2025 deliveries fell 9% and whose automotive revenue dropped 11% in Q4 2025. Regulatory credit revenue collapsed from $890 million in Q2 2024 to $380 million in Q1 2026.
Q1 2026 margin gains were partly warranty and tariff one-timers, energy revenue turned negative at -12% YoY, and inventory days climbed to 27 from 22. Insider activity is net selling across 49 recent transactions, and Polymarket assigns a 70% probability TSLA touches $375 in June.
Why Some Investors Want to Wait There is a case for waiting. The balance sheet is fortress-grade, energy storage gross profit hit a record $1.1 billion in Q4 2025, and FSD’s recurring revenue is among the cleanest software stories in autos. Investors waiting for Robotaxi expansion or an AI5 chip milestone could be rewarded if execution lands.
The next two reports will clarify the setup. A delivery report below the 450,000 to 475,000 consensus band, another energy decline, or sub-20% automotive gross margin would tip decisively bearish. A clean Cybercab ramp would do the opposite.
What the Tape Is Showing Shares trade at $381.61, down 15.14% year to date while the S&P 500 is up 7.58%. That is a 22-point relative gap in six months. One-month performance is -10.42%, and the stock sits below both the 50-day ($403.68) and 200-day ($417.32) moving averages.
The consensus analyst target of $420.55 across 47 covering analysts (23 Buy, 17 Hold, 7 Sell) implies roughly 10% upside. Prediction markets see it differently, pricing $375 at 70% and $345 at 16.5% probability for June.
Why the Bearish Case Wins at This Price At $381.61, the risk/reward skews bearish. The setup combines a 204x forward multiple with a low-single-digit margin auto business losing pricing power, a collapsing regulatory credit tailwind, and an energy segment that stopped growing. Tech multiple compression alone could halve the P/E; a return toward auto-peer multiples would imply far more.
The path to $190 runs through three catalysts over the next 12 months: a Q2 or Q3 delivery miss, a margin reset once warranty and tariff benefits roll off, and a Robotaxi or Optimus timeline slip that prediction markets already assign 2.8% and 1.3% near-term probabilities. Each chips away at the AI optionality holding the multiple up.
What invalidates the thesis: a clean Cybercab ramp, durable 22%-plus automotive gross margins without one-time aid, and FSD monetization scaling beyond 1.28 million subscribers into a true platform business. Absent that, the stock is priced for a future the operating numbers are not yet underwriting.
Tesla trading at a Magnificent Seven multiple on a margin-compressed automaker’s earnings is the cleanest setup for downside in large-cap tech right now.
HomeIndustriesSunrun, a provider of home battery storage, is working with Tesla to meet the energy needs of AI data centersPublished: June 24, 2026 at 2:28 p.m. ET
Shares of Sunrun, the home solar-panel and battery-storage provider, are surging as investors consider the company’s ability to play a more substantial role in the expensive artificial-intelligence buildout.
Sunrun RUN on Wednesday said it would work with Elon Musk’s Tesla TSLA and the energy-management platform Renew Home to deliver more than 16 gigawatts of flexible energy capacity to hyperscalers and utilities.
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The two companies obviously have a lot in common, and it goes beyond having Elon Musk as their CEO. The reality is that they are both stocks valued and bought today, not for their current earnings, but for what they could become in the future.
However, there are key differences between the investment profiles of Tesla (TSLA 0.62%) and Space Exploration Technologies (SPCX 0.04%), better known as SpaceX, that make them suitable for different types of investors and also challenge the notion that folding Tesla into SpaceX is a good idea.
Image source: Getty Images.
Three key differences between Tesla and SpaceX The major factors to consider are as follows:
Tesla's projects (electric vehicles, robotaxis, and Optimus robots) embody artificial intelligence (AI). At the same time, SpaceX is largely dependent on end demand for AI, not least for its xAI business and its orbital data center ambitions. The scaling of Tesla's long-term recurring income drivers, namely robotaxis and Optimus are, despite the delays and previously over-optimistic assumptions articulated by Musk, much closer to near-term fruition than SpaceX's. The two companies have vastly different medium-term capital expenditure requirements and cash flow profiles, with SpaceX requiring significantly more investment. Putting these points together, it's clear that, while both are growth stocks and priced as such, Tesla is less risky than SpaceX and has a shorter time horizon before it starts scaling earnings and cash flow. That's not to argue that Tesla is necessarily the better stock, but rather to point out that they will suit different types of investors.
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Capital expenditure requirements and cash flow The chart below shows the Wall Street consensus on capital spending. It implies that SpaceX will put more into capital expenditures than it generates in revenue in 2026 and will still be at a whopping 40% of revenue in 2030.
Meanwhile, Tesla's relative capital spending is expected to decline as revenue grows and its phase of significant investment in securing its supply chain moderates. Tesla is investing heavily right now to build a lithium refinery and a lithium battery production plant, and is beginning to produce the Cybercab, Semi, and Optimus.
Data source: S&P Global Market Intelligence. Wall Street consensus. Chart by the author.
Tesla's catalysts are near-term Investors can be forgiven for growing restless given the timing of Tesla's key initiatives (robotaxis/Cybercab and Optimus); the reality is that they are much closer to fruition than orbital data centers.
For example, Tesla is taking a very cautious approach to ramping the robotaxi rollout. On the last earnings call, Musk made it clear that "it wouldn't be right for us to go to like very large scale unsupervised FSD when we know that there are software improvements in the pipeline that would improve safety." Those improvements are likely to come with v15 of its full self-driving (FSD) software due in late 2026 or early 2027.
Image source: Tesla.
That's when investors can start to expect a significant and "very large scale" rollout. Still, it's a lot closer than SpaceX's orbital data centers. SpaceX expects to deploy them in 2028, but as clearly stated in the initial public offering (IPO) registration filing, "the timeline for certain of our initiatives involving unproven or new innovations, including our goal of deploying 100 gigawatts of annual compute power to orbit ... may be difficult or impossible to determine."
A different kind of AI company As previously discussed in more detail, Tesla's solutions embody AI, making it one of the most exciting ways to play on the growth of AI capability. While SpaceX also benefits from these trends, it's much more dependent on the growth in AI applications. If demand slows, it could "result in existing terrestrial data centers sufficiently meeting such demand, thereby reducing the need for our orbital AI compute infrastructure," according to SpaceX filings.
Which stock is better? Ultimately, the decision boils down to your risk profile, level of confidence in the growth of AI applications, and willingness to wait for each company's growth catalysts to come to fruition.
Those differences in investment profiles also make a potential merger somewhat problematic, as Tesla investors will be swapping the likelihood of a ramp in recurring cash flows from robotaxis and Optimus for the prospect of those cash flows being reinvested to support long-term growth in SpaceX's existing businesses. That might not suit most Tesla investors unless the acquisition price is a significant premium.
Sunrun (NASDAQ:RUN) stock is up 26% to $16.17 in midday trading Wednesday after the residential solar leader unveiled a sweeping virtual power plant (VPP) partnership with Tesla (NASDAQ:TSLA | TSLA Price Prediction) and Renew Home. The intraday move tracks toward one of Sunrun’s biggest single-session gains in months.
The deal aims to deliver more than 16 gigawatts (GW) of flexible energy capacity to hyperscalers and utilities. That’s a direct play on the surge in electricity demand from data centers and artificial intelligence workloads.
Tesla is the named partner here, not a big stock mover on the news. The partnership is highly impactful to small-cap Sunrun but largely immaterial to Tesla shares at the company’s roughly $1.44 trillion market value.
A 16-Gigawatt Distributed Power Plant Aimed at AI The coalition is aggregating dispatchable capacity from hundreds of thousands of home battery systems operated by Sunrun and Tesla, plus flexible peak capacity from more than 8 million smart thermostats and devices managed by Renew Home. The companies describe it as the country’s largest distributed power plant, deployable in “months, not years” with no new hardware, interconnection, water, or land required from offtakers.
In Virginia’s Data Center Alley, the partners already have more than 300 megawatts (MW) available for immediate deployment, expected to grow to at least 500 MW by 2030. Capacity for hyperscalers will be allocated on a first-come, first-served basis, and the group committed capacity to PJM’s proposed Reliability Backstop Process, which they say could immediately unlock over a gigawatt.
Sunrun CEO Mary Powell framed the stakes bluntly, declaring, “The grid of the 1800s cannot power the innovation of 2026.” Tesla’s Colby Hastings asserted that the answer “is already in place” in the batteries, thermostats, and electric vehicles inside millions of American homes.
AI Power Demand Sets the Stage The timing matters here. A Goldman Sachs Commodities Research study cited by the partners projects U.S. data center power demand to climb to 41 GW in 2026 and 66 GW in 2027. Sunrun is positioning itself as a fast-to-deploy answer to that load curve.
A Brattle Group analysis referenced in the release also estimates that better grid utilization could reduce U.S. electricity bills by $110 billion to $170 billion over the next decade. For Sunrun, that pitch reframes residential solar as utility-style infrastructure rather than a one-off hardware sale.
The macro backdrop is supportive. The Department of Energy projects data centers will account for up to 12% of U.S. electrical demand by 2028, a tailwind Sunrun and Tesla have both flagged in recent earnings commentary.
Breakthrough or Hype Cycle? The bull case is sizable. Sunrun could tap a recurring revenue stream tied to AI-driven power demand, built on what management has called the largest residential battery fleet in the country. Sunrun’s Q1 2026 results showed momentum already, with revenue of $722 million, up 43% year over year and a record 73% storage attachment rate.
The bear case is just as real, though. This is a framework or capacity-as-a-solution structure, not firm signed hyperscaler revenue contracts, and execution depends on customer enrollment, utility programs, and regulatory approvals. Sunrun stock also remains volatile and is still down 11% year-to-date.
Retail sentiment on Sunrun stock has turned visibly bullish, and some traders are floating short-squeeze speculation around the name. That chatter is worth flagging, though no firm short-interest data supports a squeeze thesis today.
What Investors Can Watch Next Near term, investors can watch for whether Sunrun stock holds these gains into the close and whether sell-side analysts respond with revised targets. The current consensus price target on Sunrun shares sits at $19.11, with 3 Strong Buy and 9 Buy ratings against 10 Holds.
The bigger tell will be conversion. Watch for whether the Virginia capacity, the PJM Reliability Backstop allocation, and any named hyperscaler offtake agreements firm up in the months ahead. That’s the line separating an infrastructure breakthrough from a transient AI hype cycle.
For now, Sunrun has reframed its story from struggling solar installer to potential distributed-grid operator. Tesla and Renew Home give the pitch genuine scale, but the contracts still have to follow. Investors comfortable with the volatility could keep position sizes measured until firm hyperscaler revenue materializes.
But while deliveries will likely dominate headlines around July 2, another metric may deserve more attention.
Tesla’s energy business is growing fast—and it could be becoming a much bigger part of the investment story.
• Tesla shares are showing limited movement. Where is TSLA stock headed?
Deliveries Still MatterThere is a good reason investors pay close attention to deliveries. Vehicle deliveries offer one of the earliest signals about Tesla’s sales performance and provide important clues about future revenue and profitability. The metric has become one of the most closely watched data points on Wall Street, often moving the stock before quarterly earnings are even released.
As a result, much of the market’s attention remains fixed on whether Tesla can reverse recent delivery weakness. But focusing exclusively on vehicle volumes may overlook a business segment that has quietly become one of Tesla’s fastest-growing operations.
The Energy Story Keeps Getting BiggerTesla’s Energy Generation and Storage segment has emerged as a significant growth engine for the company. The division includes products such as Megapack utility-scale battery systems and Powerwall residential energy storage solutions.
Demand has surged as utilities, corporations and governments invest heavily in grid modernization, renewable energy integration and backup power infrastructure. Unlike the automotive business, which continues to face pricing pressure and intense competition, Tesla’s energy segment has delivered strong growth and improving profitability.
The scale of the opportunity is becoming difficult to ignore.
Today, it is one of the company’s fastest-growing divisions.
While investors continue to debate vehicle deliveries, pricing pressure and EV competition, Tesla’s energy business is benefiting from a different set of tailwinds. Utilities are investing in battery storage, data centers are consuming more electricity, and power grids around the world are being upgraded to accommodate growing energy demand.
Those trends have helped turn products like Megapack from a niche offering into a major source of revenue growth. The company’s Megapack factory in California has been operating at scale, while a second Megafactory in Shanghai is expected to further expand production capacity.
Why Investors May Need To Pay AttentionFor years, Tesla’s valuation has been tied largely to expectations surrounding vehicle sales. That may be changing.
While automotive revenue remains the company’s largest business, energy storage is becoming a more meaningful contributor to overall growth. The segment is also benefiting from powerful long-term trends, including rising electricity demand, AI-driven data center expansion and increased investment in grid infrastructure. Those trends could provide Tesla with another avenue for growth beyond vehicle deliveries.
That’s why investors watching Tesla’s next delivery report may want to look beyond the headline number. Deliveries will tell investors how Tesla’s car business is performing.
But energy revenue may offer an increasingly important glimpse into where the company’s next phase of growth could come from. If Reuters’ estimate proves accurate, Tesla’s energy business would be approaching the size of a Fortune 500 company on its own.
Photo Courtesy: Kittyfly on Shutterstock.com
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The National Transportation Safety Board has opened an investigation into a crash that happened over the weekend in Texas, in which a driver slammed into a home in Katy, Texas, killing a resident.
The family of that victim, 76-year-old Martha Avila, have also filed a lawsuit against the driver, Michael Butler, and Tesla, alleging negligence.
The NTSB joins the National Highway Traffic Safety Administration (NHTSA) in investigating the crash. While Butler allegedly told local authorities that he was using Tesla’s Autopilot feature before the crash, the company has since said it has data showing that Butler’s accelerator pedal was pressed to the floor. This “overrode” what was more likely the Full Self-Driving software on his car, pushing his speed to 73 miles per hour before he hit the house, according to Tesla.
Tesla has not provided more proof beyond those statements, though. The NTSB and NHTSA investigations will likely require the company to turn over logs created by the car’s onboard computers that will ultimately reveal how exactly the crash happened.
Tesla (TSLA, Financials) is under another federal safety review after a Model 3 crashed into a home in Katy, Texas, killing 76-year-old Martha Avila.
The National Highway Traffic Safety Administration opened a special crash investigation into the incident.
Tesla pushed back on the idea that its self-driving system caused the crash. Elon Musk said on X that the incident “makes no sense,” arguing that FSD drives slowly on neighborhood streets.
Ashok Elluswamy, Tesla's Autopilot head, said the driver manually overrode the system by pressing the accelerator all the way down. He said the car reached 73 mph and the pedal was still pressed after impact.
The case comes after another recent Tesla crash into a home in California that injured six people.
For investors, the concern is familiar. Tesla is trying to build more value around FSD and future robotaxis, but each new safety review keeps regulatory risk in the spotlight.
Tesla TSLA and BYD BYDDF expanded their presence in the European auto market in May as consumer demand for electric vehicles helped lift overall new-car registrations across the region.
The European Union recorded 955,013 new passenger vehicle registrations during the month, an increase of 3.2% from a year earlier. Growth moderated from April's pace, but the market remained on an upward trajectory. France and Italy delivered the strongest gains among the bloc's largest markets, while Germany posted a modest increase.
Tesla posted May sales of 21,767 vehicles in the EU, raising its market share to 2.3% from 0.9% a year ago. BYD also continued to gain momentum, with its share of registrations reaching 2.7%, compared with 1.1% in the prior-year period.
The broader shift toward electrified transportation remained evident. Battery-electric vehicles represented one-fifth of all new registrations in the EU, up from 15.3% a year earlier. Hybrid-electric models accounted for the largest portion of the market, while the combined share of petrol and diesel vehicles continued to decline.
During the first five months of 2026, EU new-car registrations increased 4.0%, supported by continued growth in electric and hybrid vehicle adoption.
Tesla shares fell sharply on Tuesday after US regulators opened an investigation into a fatal crash in Texas involving one of the company's vehicles, adding fresh scrutiny to the automaker's driver-assistance technology.
The stock dropped about 5% in early trading as investors weighed the implications of the investigation against an already challenging backdrop for technology stocks.
The broader market also came under pressure. The S&P 500 fell 1%, while the Nasdaq Composite declined 1.5% as a technology selloff intensified. The Dow Jones Industrial Average traded around the flatline.
Technology stocks outside the semiconductor sector showed more resilience, with companies, including Microsoft and Amazon, advancing alongside defensive names such as Walmart, Procter & Gamble, and Johnson & Johnson.
The immediate catalyst for Tesla's decline appeared to be an announcement from the National Highway Traffic Safety Administration late Monday that it had opened a special crash investigation into a fatal accident involving a Tesla Model 3.
The crash occurred in Katy, Texas, near Houston, where a Tesla vehicle struck a home, killing 76-year-old Martha Avila.
According to Harris County authorities, the driver, Michael Butler, told investigators he had been using Tesla's partially automated driving systems when the vehicle left its lane and crashed into the residence.
The National Highway Traffic Safety Administration said it would examine the incident as part of a special investigation.
Tesla executives publicly disputed aspects of the driver's account following the crash.
Chief Executive Elon Musk questioned whether Tesla's Full Self-Driving system could have been responsible for the accident.
"This crash makes no sense," Musk wrote on X.
"FSD drives slowly through neighborhood streets and this was a high speed crash!" he added.
Tesla Vice President of Autopilot and AI Ashok Elluswamy also commented on the incident.
"In this case, the driver manually overrode self-driving by pressing the accelerator all the way to 100% of the accel pedal in this residential area," Elluswamy wrote in a response on X.
"They reached a speed of 73 mph during the crash, and had the accelerator pressed even after the crash."
The competing accounts remain under investigation and have not been independently verified.
Tesla's owner manuals state that Full Self-Driving (Supervised) requires drivers to remain attentive, monitor the road, and be prepared to take control of the vehicle at any time.
Deliveries outlook remains constructiveDespite the regulatory overhang, Wall Street analysts remain focused on Tesla's upcoming second-quarter delivery results.
UBS reiterated its Neutral rating on Tesla and maintained a $364 price target.
The firm raised its second-quarter delivery forecast to 405,000 vehicles from a previous estimate of 380,000 units.
That projection would represent a 5% increase from a year earlier and a 13% increase from the first quarter.
UBS noted that the estimate sits slightly above the Visible Alpha consensus forecast of 402,000 deliveries.
The bank said buyside expectations currently range from 400,000 to 420,000 vehicles, placing its forecast toward the lower end of investor expectations while acknowledging the potential for upside if Tesla finishes the quarter strongly.
Beyond vehicle deliveries, UBS also expects continued strength in Tesla's energy business.
The firm forecasts energy storage deployments of 13.4 gigawatt-hours during the quarter, representing growth of 40% year-over-year and 53% sequentially.
For investors, Tuesday's decline highlighted the tension between Tesla's improving near-term operating outlook and the ongoing regulatory and legal scrutiny surrounding its driver-assistance technologies, which remain central to the company's long-term autonomous driving ambitions.
Tesla (TSLA +0.22%) stock tumbled 6%.1 through 3:15 p.m. ET Tuesday, one week before Tesla is expected to report its Q2 deliveries number -- and just hours after Swiss megabanker UBS announced it's sticking with only a "neutral" rating on Tesla shares ahead of the report.
Image source: Tesla.
What UBS thinks about Tesla A "neutral" rating implies that this analyst is giving Tesla a kind of shrug and a pass on its current valuation. But as StreetInsider.com reports, UBS analyst Joseph Spak thinks Tesla's stock price could decline after deliveries are reported. His price target for the stock, $364, is 10% below Tesla's Monday closing price.
(So maybe Spak should really be advising investors to sell Tesla.)
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What should investors do with Tesla now? Why isn't Spak telling investors to sell? For one thing, the analyst is raising estimates for Q2 deliveries from 380,000 electric cars sold to 405,000, representing 5% year-over-year growth.
Problem is, even 405,000 units -- if this is the right number -- could still miss consensus forecasts for the quarter, which Spak estimates range from 400,000 to 420,000 (so 410,000 at the midpoint). This sets up a scenario in which Tesla might do better than Spak expected, but still worse than what most people hoped for in Q2. And this is a scenario that could, in fact, cause Tesla's stock price to decline.
All this said, there's still one scenario in which holding Tesla stock might make sense. Spak points out that the company's Energy Generation and Storage business could report up to 40% sales growth in Q2 -- eight times better than Automotive.
Whatever happens with car deliveries next month, considering that Tesla's been earning twice as much on Energy sales as it has on Automotive lately, this could end up making Tesla a winner on earnings day.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
With SpaceX (SPCX) now settling in its second full week on public markets, @morningstar's Seth Goldstein turns his attention to Tesla (TSLA) and its struggling EV business. He sees deliveries improving as the Mag 7 company hits the gas on robotaxi production.
The "Magnificent Seven" are some of the largest tech-focused companies by market cap: Nvidia, Alphabet, Apple, Microsoft, Amazon, Meta Platforms (META 0.18%), and Tesla (TSLA +0.22%).
But Space Exploration Technologies (SPCX 0.03%) is making the case for why the Magnificent Seven as a category may be outdated.
Although in its brief period on the public market, SpaceX briefly surpassed Microsoft and Amazon in market cap, the stock has since fallen by 31% from its intraday high. It closed at $154.60 per share on June 22 -- up just 3% from its opening trading price of $150.
Even so, its market cap of about $2 trillion clears Tesla at $1.5 trillion, and Meta Platforms at $1.4 trillion. SpaceX is now the seventh-most-valuable company in the world, behind Nvidia, Alphabet, Apple, Microsoft, Amazon, and Taiwan Semiconductor. But is the company sending shock waves across the market a better buy than Tesla or Meta Platforms?
Image source: Getty Images.
The case for SpaceX over Tesla Tesla's profitability has taken a massive hit in recent years as sales growth in its electric vehicle and energy storage businesses has slowed. The company is no longer tethering its long-term growth to the passenger electric vehicle market. Tesla's $25 billion capital expenditure plan for this year is centered on its humanoid robots (Optimus), fully autonomous robotaxis (Cybercabs), the Tesla Semi, and its lithium refining and battery manufacturing infrastructure.
Meanwhile, SpaceX has a dominant share of the commercial space launch industry: It has been responsible for launching over 80% of the mass that the world has put into orbit each year since 2023.
SpaceX is also a major player in artificial intelligence, particularly after its merger with xAI earlier this year. That position will only expand with its $60 billion acquisition of Anysphere -- the maker of the AI coding tool Cursor -- which it announced last week. AI will likely be the main driver of SpaceX's near- to medium-term revenue growth. Analysts at Morgan Stanley forecast that SpaceX's revenue will hit $330 billion in 2030, and anticipate 57% of that will come from AI.
SpaceX has a bold plan to build a massive Gigasat factory in Bastrop, Texas, to produce AI data center satellites at high volume. About 100 miles away, SpaceX, Tesla, and Intel (INTC 0.64%) are collaborating on Terafab, which is expected to be the world's largest semiconductor fabrication plant. Terafab's goal is for its annual production capacity to eventually teach 1 terawatt (1,000 GW) of AI compute capacity -- although the project is still in the early stages, it is expensive, and it faces no shortage of supply chain challenges.
CEO Elon Musk has asserted that the ability to scale up an orbital constellation of AI data centers is mostly limited by a lack of AI computing hardware. This is why building Terafab is so critical to SpaceX's orbital data center plan.
If Tesla were still generating consistently high-margin free cash flow and had significantly more cash and cash equivalents on its balance sheet than debt, it would have a clear advantage over SpaceX. But with both companies spending full throttle in pursuit of big ideas, the better buy between them will really come down to which one's ideas will pay off enough to justify its high valuation.
Tesla's Cybercabs will face no shortage of competition from the autonomous ride-share offerings of Alphabet-owned Waymo and other self-driving vehicle companies. And its Optimus robots will have to compete with the designs of numerous established robotics companies like Boston Dynamics. By contrast, no rival comes close to being a true peer with SpaceX in the areas where it is pursuing its bold plans.
So if I had to choose between these two growth stocks, I would buy SpaceX over Tesla. But the best course of action for retail investors now may be to keep SpaceX on their watch lists until it shows measurable progress in large-scale manufacturing of AI satellites and compute, outlines the costs of launching these satellites (which will have many times the mass of its Starlink satellites), and addresses the light pollution consequences of keeping these AI satellites in sun-synchronous orbits, among other issues.
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One of the best values on the market Like SpaceX and Tesla, Meta is on a spending spree. Only in Meta's case, Wall Street doesn't like it. The Facebook parent has been the second-worst-performing Magnificent Seven stock year to date, ahead of only Microsoft.
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Meta recently raised its 2026 capex budget to a range of $125 billion to $145 billion. The top of that range is roughly double the $72 billion it spent in 2025. With capex growing faster than revenue, Meta's profitability and margins will further compress, which may concern some investors, especially considering that Meta's spending is mainly on AI data centers for its internal use rather than to lease to external customers.
This is a fundamentally different approach than the strategies of hyperscalers like Amazon, Microsoft, and Alphabet -- which are cloud providers with clear blueprints for monetizing their AI infrastructure investments. So investors will want to see how Meta can deliver a clear return on investment from its AI spending, such as through increased advertising revenue or higher levels of engagement on Instagram, Facebook, Messenger, and WhatsApp.
Meta has yet to prove that its AI investments are worth the price. What's more, Meta has a history of pouring money into projects that don't have a clear path to profitability. After all, Facebook changed its name to Meta Platforms in 2021 because it thought the metaverse would be the next big thing. The company's Reality Labs segment is responsible for its research and development in the metaverse, augmented and virtual reality, and it makes products like the Meta Quest virtual reality headset. Between 2021 and 2025, Reality Labs reported a net operating loss of $77 billion.
Even with Meta's arguably excessive spending and the poor track record of its Reality Labs unit, it's still a better buy than SpaceX or Tesla right now. Meta is simply too cheap to ignore, sporting a forward price-to-earnings ratio of just 17.9.
TSLA PE Ratio (Forward) data by YCharts.
For context, the S&P 500 (^GSPC +0.33%) has a forward P/E of 22.5.
SpaceX and Tesla could outperform Meta over the ultra-long term, but their bold bets could also backfire. In contrast, Meta doesn't need to actively spend on AI to be a cash cow.
Shares of Tesla Inc NASDAQ: TSLA are trading around $410 this week, holding on to most of the gains they’ve logged since hitting a multi-month low in late April. The broader bull case has been well documented, from full self-driving and robotaxis to Optimus and the longer-term robotics ambition.
Tesla Today
$382.60 +0.99 (+0.26%)
As of 10:25 AM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$288.77▼
$498.83P/E Ratio349.45
Price Target$405.06
But in recent weeks, a new and potentially more significant narrative has been quietly building in the background. That narrative is the growing consensus that Tesla and SpaceX are heading toward a merger, and the latter’s blockbuster IPO last week has brought it into even sharper focus. SpaceX has gone officially public, and the timing has triggered a fresh round of commentary from Wall Street's most vocal Tesla bulls.
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While Tesla’s retail investors have been busy debating robotaxi rollouts, the conversation among serious institutional voices has shifted.
The SpaceX IPO Changes EverythingLast Friday, SpaceX listed on the Nasdaq in what's considered the biggest IPO in history. It was oversubscribed fourfold; retail investor demand alone topped $100 billion, and firms like BlackRock were looking to invest at least $5 billion themselves.
But beyond the headlines, the IPO has fundamentally changed the conversation around Tesla in a way that hasn't quite sunk in yet. Up until last week, the prospect of a Tesla-SpaceX merger was a fascinating theoretical exercise built on speculation and Musk's track record.
However, now there's a publicly traded counterparty with a real market valuation, a real share structure, and a real set of public shareholders. The merger thesis has gone from being hypothetically interesting to a tangible scenario that the market can actually start pricing in.
Why Ives Thinks It's ComingThat brings us to the comments from Wedbush's Dan Ives, one of Wall Street's most consistently bullish voices on Tesla. Speaking to Bloomberg ahead of the SpaceX listing last week, Ives put the odds of a Tesla-SpaceX merger within the next year at 80% and framed it as the logical next step in a broader strategy that Elon Musk, the founder and CEO of both companies, has been quietly executing for years.
His reasoning is worth exploring properly. Ives sees the merger not as a corporate vanity project, but as part of a deeper play around AI and data. In his words, the eventual combination is about consolidating "the broader plan, specifically when it comes to AI data and all under that Musk ecosystem associated from a control perspective."
He went further, arguing that SpaceX itself should be viewed less as a traditional space company and more as a "data AI play" with the potential to host data centers in space within three or four years.
That reframing matters because it directly challenges the way many investors currently think about both companies. If Ives is right, then everything from full self-driving to robotaxis to Starlink will eventually form part of a single, integrated AI and data empire that's far more valuable as one entity than as two.
Musk Has Done This BeforeWhat gives the merger thesis genuine credibility isn't just Ives's commentary; it's the pattern that comes before it. Earlier this year, Tesla invested in Musk's xAI, which had acquired X (formerly Twitter). SpaceX has since acquired xAI, meaning Tesla shareholders already have a substantial indirect link to SpaceX sitting on their balance sheet, without a formal merger having even taken place.
That's not a coincidence; it's an intentional and methodical chain of transactions. Each step has brought Tesla and SpaceX closer together operationally and financially, quietly laying the foundations for something much larger.
Add in the joint Terafab semiconductor fabrication facility currently under development, which will manufacture chips for both companies, and the picture of two organizations being deliberately stitched together becomes hard to ignore. Now that SpaceX is publicly listed, the final structural barrier to a formal combination has effectively been removed.
A Long Shot Worth WatchingAll that being said, the risks are real, and there are still plenty of reasons to be cautious. Both companies are trading at stretched multiples in their own right, and merging them introduces meaningful execution risk.
Tesla, Inc. (TSLA) Price Chart for Wednesday, June, 24, 2026
Prediction markets, which have become increasingly recognized for their forecasting accuracy, are still placing the odds of a merger before May 2027 at around 50%, well below Ives's call. There's also the not-so-small matter of the legal scrutiny and shareholder battles that any deal of this scale would inevitably attract.
Still, the direction of travel feels clearer than it did even a month ago. Musk has a long track record of eventually delivering on ideas that initially seemed implausible, and the SpaceX IPO might have just handed him the final piece of the puzzle.
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On June 22, Space Exploration Technologies (SPCX 0.03%) had its worst session as a public company -- falling 16.4% to close at $154.60 per share. That puts SpaceX down 31.5% from its intraday high of $225.64 per share.
Here are four reasons why SpaceX should merge with Tesla (TSLA 0.27%), and why it would make the growth stock more appealing for long-term investors.
Image source: Getty Images.
1. Simplification If you've tuned into recent presentations by SpaceX and Tesla CEO Elon Musk, you've probably noticed that at times it's difficult to distinguish which efforts fall under SpaceX versus Tesla.
While Tesla has been a public company for longer, SpaceX has been the one slowly gobbling up Musk's other efforts. In 2025, xAI bought social media platform X. Then, earlier this year, SpaceX bought xAI. But the bulk of Musk's robotics, energy storage, and autonomous vehicle ideas are under Tesla.
Merging Tesla with SpaceX would bring all these ideas (and creativity) under one umbrella.
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2. Terafab collaboration In March, Elon Musk gave a presentation on a collaborative effort between Tesla, xAI, and SpaceX (Intel joined in April) to build the world's largest chip plant called Terafab. In the presentation, Musk discussed why Tesla, xAI, and SpaceX are builders and have already accomplished once impossible feats. Again, this is yet another nod that "we" refers to the collective efforts of Musk-led companies.
SpaceX is designing its AI compute satellites to operate on Nvidia graphics processing units and has a reference design for Alphabet's Tensor Processing Units (TPUs). But AI compute capacity will be a limiting factor in scaling AI satellite production. xAI built the world's first gigawatt-scale AI training cluster, and SpaceX believes it is the only company capable of building orbital AI compute at scale. But that will depend on compute availability and SpaceX's ability to launch heavy payloads. Similarly, Tesla's autonomous driving technology and Optimus robots are incredibly compute-intensive.
Bringing at least a portion of the chip supply in-house rather than relying on external suppliers is in the interest of SpaceX and Tesla. Putting Terafab under one entity instead of separate companies could speed up its construction and simplify its financing. Musk expects Terafab to be around 100 million square feet, which is 10 times the size of Tesla's Giga Texas factory. One terawatt of compute output per year is double the current U.S. annual consumption. So if successful, Terafab could ensure that SpaceX and Tesla can pursue their long-term goals without relying on the chip industry to increase production.
3. xAI is a key input for Tesla's growth xAI and its Grok large language models (LLMs) are already integrated with Tesla's self-driving technology and energy storage platforms. In March, Musk posted on X about a collaboration between Tesla and xAI called Macrohard or Digital Optimus. Digital Optimus will run on Tesla's AI4 chip and use Grok LLMs. If successful, Optimus could transform digital workflows rather than being solely a robotics solution for automating repetitive physical tasks.
So, while SpaceX's acquisition of xAI makes a ton of sense for SpaceX scaling AI data centers, Tesla is also heavily dependent on xAI. Merging SpaceX and Tesla would give xAI a straightforward path to support both companies, rather than having Tesla serve as both a partner and a customer.
4. Energy storage in space SpaceX's boldest idea is to build constellations of AI compute satellites in space. In theory, these orbital data centers would harness the power of free, predictable solar energy at radiation levels higher than those at Earth's surface.
In its Form S-1 filing with the Securities and Exchange Commission, SpaceX said it could launch millions of AI satellites in sun-synchronous orbit (SSO). SSO means orbiting Earth's poles so that satellites pass over locations at the same local time each day. For example, a point along the equator every 100 minutes. This route provides predictability, but it can also cause significant light pollution when satellites pass over dark skies at night. Most current Starlink satellites don't use SSO.
Tesla could theoretically help SpaceX meet the power-hungry needs of orbital AI data centers without operating in a route that would be invasive to nighttime sky viewing for the naked eye and astronomers. SpaceX AI satellites equipped with Tesla energy storage technology could allow them to avoid SSO and spend more time in Earth's shadow at night, reducing light pollution and interference with observatories. However, energy storage systems would likely add weight to payloads, not to mention battery life issues.
Still, SpaceX and Tesla would likely benefit from collaborating on hardware systems and energy storage for AI compute satellites.
Merger updates could be coming soon While investors solely interested in SpaceX's vision, rather than Tesla's, and vice versa, may balk at a potential merger, it ultimately makes the most sense for both companies.
The reasons extend far beyond focusing Musk's attention on one company. SpaceX and Tesla are collaborating on Terafab, and Tesla's energy storage solutions could prove valuable for SpaceX. SpaceX-owned xAI is deeply ingrained in Tesla's autonomous vehicle and humanoid robot efforts.
Investors should pay close attention to SpaceX's upcoming earnings call to see if Musk discusses a potential merger and what it could mean for SpaceX and Tesla investors.
Elon Musk is no longer a trillionaire after sharp declines in SpaceX and Tesla shares wiped out more than $150 billion from his fortune and dragged his net worth below the $1 trillion mark.
According to Bloomberg's Billionaires Index, Musk's wealth stood at $957 billion on Wednesday, down from the historic milestone he crossed earlier this month after SpaceX's blockbuster initial public offering propelled him into the trillionaire club.
The reversal comes amid a broad selloff in technology stocks and growing investor concerns over the sustainability of massive spending on artificial intelligence and ambitious long-term projects.
SpaceX had become the centrepiece of Musk's fortune after its June 12 market debut.
The rocket company was briefly valued at nearly $3 trillion as retail investors flocked to the stock, attracted by Musk's vision of building space-based data centres and eventually establishing a human presence on Mars.
However, the rally has cooled rapidly.
SpaceX shares plunged 16% on Monday and ended the session on Tuesday at $156, only modestly above their opening trading price of $150 and well below the record high of $225 reached just a week ago.
The IPO itself was priced at $135 a share, meaning early investors remain in profit despite the recent declines.
The weakness has cut SpaceX's market capitalisation from a peak of around $2.99 trillion to just over $2 trillion, erasing almost $1 trillion in value in little more than a week.
Monday's decline alone erased more than $152 billion from Musk's net worth, according to Forbes estimates.
The decline has coincided with increasing scrutiny of SpaceX's valuation and its long-term business plans.
Ahead of its public listing, the company's regulatory filings revealed that it posted a loss of $4.9 billion in 2025.
Its artificial intelligence segment also incurred capital expenditures of $12.7 billion, underscoring the enormous financial commitments required to pursue its expansion plans.
Some investors have begun questioning whether the company's moonshot projects can justify its valuation.
The upcoming expiry of the lockup period, when early investors and insiders are permitted to sell their shares, is also emerging as a key test for the stock.
Danni Hewson, head of financial analysis at AJ Bell, said the recent volatility was not unusual for newly listed companies.
"SpaceX might have seemed charmed after its record-breaking IPO and subsequent rally, but it's come down to earth with a bump over the past couple of days, with shares at one point falling below the opening price on its market debut."
She noted that newly public companies often experience periods of volatility as investors reassess valuations and decide whether to lock in gains.
"Post-IPO stocks often enter a period of volatility as the market gets to grips with the new entrant, some investors rush to cash out, and others assess at what price they are willing to jump in."
"For a stock like SpaceX, a lot of decision-making might have been emotional and based on the anticipation of huge leaps forward in space exploration and utilisation, but investing should be something treated with clear eyes and patience, even when such huge numbers are involved."
Despite the recent decline, SpaceX remains by far Musk's most valuable asset.
According to Bloomberg data, his SpaceX holdings are worth about $744 billion and account for nearly 80% of his total net worth.
Musk's fortune has also been hit by weakness in Tesla shares.
The electric vehicle maker fell 5.8% on Monday as technology stocks broadly sold off amid concerns over elevated valuations and heavy spending on artificial intelligence infrastructure.
His stake in TSLA is currently valued at approximately $158 billion.
Like all market fortunes, Musk's wealth remains closely tied to the performance of his companies and could rebound if SpaceX shares recover.
Despite dropping below the $1 trillion threshold, Musk remains comfortably the world's richest person.
Bloomberg estimates that his lead over the second-richest individual, Google co-founder Larry Page, is roughly $660 billion, a gap larger than the entire fortunes of several of the world's wealthiest individuals combined.
Space Exploration Technologies (SPCX 0.03%) is finally public. Tesla (TSLA +0.22%) stock has been public for 16 years. Both companies were set up and are CEO'd by Elon Musk, but SpaceX is clearly the newer, shinier toy today -- and a lot of investors are probably wondering whether the time has come to put Tesla on a shelf and take out SpaceX to play with instead.
And so the question today: Should you ditch Tesla stock in favor of SpaceX?
Image source: The Motley Fool.
SpaceX and Tesla: the similarities Broadly speaking, both SpaceX and Tesla are "tech stocks." Both companies were established in their current forms by tech wunderkind and world-first trillionaire Elon Musk, who leads both companies as CEO.
SpaceX spends a lot of time working on space (as one might expect) and the corollary industry of satellite communications. As its prospectus makes clear, however, SpaceX sees its greatest future revenue opportunity in artificial intelligence. Out of the company's entire $28.5 trillion "total addressable market" (TAM), says Elon Musk, $26.5 trillion will come from building AI infrastructure, providing AI services, and selling AI subscriptions.
Tesla is a little different.
From its origins as an electric car company, Tesla has branched out into at least two tangentially related fields. First, in solar power and energy storage through its 2016 acquisition of SolarCity, and more recently, in robotics with the unveiling of Optimus in 2022.
Of these three fields, Energy Generation and Storage is currently Tesla's most profitable business, with a 30% gross profit margin, according to data from S&P Global Market Intelligence. But electric cars offer the greatest promise through subscriptions for autonomous driving software, sales of self-driving cars, and/or transportation-as-a-service. In public statements, Musk has predicted that robotic vehicles could drive Tesla's market capitalization to $5 trillion or more -- while a market for 1 billion robots per year could turn Tesla into a $25 trillion company!
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SpaceX and Tesla: the differences Broadly speaking, perhaps the biggest similarity that SpaceX and Tesla share (well, aside from their CEO) is that they're both valued very much on future prospects -- or what investors hope their future prospects might be -- AI riches in the case of SpaceX, and self-driving cars and humanoid robots at Tesla.
What's perhaps most curious, though, is that while both SpaceX and Tesla are priced based on pie-in-the-sky prospects that are incredibly difficult to value, the two stocks are priced very differently today.
The more mature company by far, Tesla today boasts just under $98 billion in annual sales, has been profitable since 2019, and earns an operating profit margin of 4.9% today. Tesla is self-funding, generating positive free cash flow of $7 billion annually, and it boasts enormous cash reserves to fund future growth -- nearly $30 billion more cash than debt on the balance sheet.
Contrast all this with SpaceX. Only five years younger than Tesla, SpaceX is still trying to figure out what it wants to be when it grows up. (Rockets? Satellites? AI satellites launched by rockets?) SpaceX generated just $19.3 billion in revenue over the past year (one-fifth of Tesla's haul), and lost nearly half that amount -- $8.7 billion. Thanks to a recent successful IPO, it's got more cash than Tesla does -- more than $100 billion -- but also more than $30 billion in debt. And SpaceX needs the cash cushion, because it's burning nearly $20 billion per year.
And yet, at $1.5 trillion in market capitalization, Tesla stock currently costs 25% less than SpaceX, which has a $2 trillion market cap!
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What this means for investors I'm the last person to argue that Tesla stock is a buy at 367 times trailing earnings. That said, it's pretty clear that SpaceX stock is even more overvalued than Tesla. For that matter, if, like most investors, you're valuing both stocks on their future prospects, Tesla's pie-in-the-sky projections are no less ambitious than SpaceX's.
That's two good reasons not to ditch Tesla stock in favor of SpaceX.
Now here's a third: According to the SpaceX IPO Prospectus, SpaceX already shares "engineering resources, intellectual property, and infrastructure across Tesla and SpaceX," and plans to "deepen [its] strategic collaboration with Tesla."
To me, this sounds like Elon Musk is contemplating merging SpaceX -- which has already merged with X and xAI -- with Tesla as well. In such a transaction, the richer SpaceX stock would almost certainly be used to buy the cheaper Tesla stock.
Indeed, that may be the strongest argument yet for not selling Tesla stock: SpaceX just might want to buy Tesla.
