Elon Musk is the founder of SpaceX and Tesla
Elon Musk is the founder of SpaceX and Tesla

NEW YORK — Elon Musk's two publicly traded companies have taken a heavy hit since the U.S. midterm elections, leaving investors asking whether Tesla or SpaceX is the better bet and which one is riskier.

Roughly $457 billion of market value left Musk's two biggest public companies between the Election Day close on Nov. 3 and the Nov. 5 close. Tesla fell 13.75% across the two sessions, from $398.50 to $343.69, while SpaceX fell 12.52%, from $141.31 to $123.62.

Both stocks bounced on Friday, with SpaceX up 5.74% to $130.72 and Tesla up 4.82% to $360.27.

Two very different growth stories

The companies' latest results point in opposite directions. SpaceX reported 161% revenue growth for the third quarter, beating Wall Street estimates, with its artificial intelligence business growing ninefold. Revenue was $14.58 billion versus $12.72 billion expected.

Tesla's growth has stalled. Its third-quarter revenue was flat at $28.0 billion, and operating income fell to $718 million, 56% below the year-ago quarter. Auto revenue fell 3% to $20.56 billion.

Valuations

Both stocks are expensive by traditional measures, but in different ways. Tesla trades at over 400 times earnings, a price that assumes its newer businesses pay off. Its valuation depends on autonomy and robotics projects that Texas and Washington can now slow down.

SpaceX is pricier relative to sales. It traded at nearly 60 times sales as of Nov. 3. Using annualized third-quarter revenue, Tesla trades at around 13 times sales.

SpaceX's profit also needs context. Its $4.4 billion in third-quarter net income got help from around $1 billion in other income and a tax benefit, and in the first nine months of 2026, the company still lost $413 million.

Why SpaceX may be riskier

SpaceX is more exposed to the AI data center debate. 24/7 Wall St. said SpaceX carries more AI data-center risk than Tesla. The cost of insuring SpaceX's debt hit a record after the elections.

Spending is heavy. SpaceX spent $19.6 billion on capital investments in the third quarter.

The stock has also been extremely volatile. After its IPO at $135 a share, it popped to about $225, then tumbled below $105 by early August.

Governance is another concern for some investors. Musk held 48.4% of SpaceX's voting power as of November 2026, according to regulatory filings.

Why Tesla may be riskier

Tesla's core business is shrinking while its valuation remains high. One Seeking Alpha analysis noted that analyst estimates for Tesla's future earnings continue to decline.

By contrast, SpaceX's AI and Starlink businesses already make money.

The merger wildcard

A possible combination complicates the picture. Tesla and SpaceX have each set up a special committee of directors to weigh a possible combination.

Not everyone thinks a deal helps Tesla holders. A Motley Fool analysis estimated a combined company would trade at around 21 times annualized sales, more than Tesla shareholders pay per dollar of sales today, and any premium to SpaceX shareholders could cut Tesla holders' share.

Political risk now hangs over the deal. Democrats' control of Congress and their wins in Texas could bring more scrutiny of both companies and Musk himself.

Bottom line

SpaceX offers faster growth and a profitable Starlink business, but at a much higher sales multiple, with heavy spending, extreme volatility and more exposure to AI data center risk. Tesla trades at a lower sales multiple but faces flat revenue and shrinking profits, with its valuation resting largely on future autonomy and robotics bets. Both carry significant political and key-person risk tied to Musk.

This article is for informational purposes only and is not investment advice. Investors should consult a licensed financial adviser before making decisions.