Two Musk companies. Two harsh pay-off reactions. Same summer.
I was sitting to write this and I knew I would be where I am now. Then I did pull the numbers and found that the story is not quite so tidy as it appears on Twitter. I’ll explain what’s actually going on, because I’ve been getting the same question from StockVane readers in various forms and I think the truth is more intriguing than either fanboy side.
Tesla reported Q2 earnings the evening of July 22. Revenue beat estimates. The good news is that’s the only obviously good news in the report. Free cash flow became negative. Expenses soared. On the call itself, Musk’s demeanor was “cautious,” according to more than one analyst, which was a stark contrast to his confident tone in previous quarters regarding the progress of robotaxi development. But Argus Research had no qualms about its message in the statement: “Consistent profit growth appears to be close to impossible for Tesla in the near term, as a significant portion of cash is being channeled into robotaxis, humanoid robots, and Tesla’s own chip fab buildout. The share price has fallen 30% YTD. This year’s biggest outlier of all individual mega-cap tech stocks. Not close.
It wasn’t kind to SpaceX either, two weeks later. The company’s first-ever public earnings report since the company became SPCX Aug. 4. The news caused shares to fall 15%. Now, SpaceX is down 28% year-to-date, trailing virtually every other megacap comparable it is compared against.
So I want to pause here since the easy story is right now “Musk’s empire is collapsing,” and I don’t believe the data is that way.
The SpaceX Story Nobody Fully Priced In Yet
SpaceX went public on June 12, selling its stock at $135 per share. On the first day of trading, it closed at $160.95, a 19.2% pop, and I had all the retail investors that I know scrambling around trying to figure out how to get an allocation before the lockup. The excitement was warranted in theory. It’s the most dominant commercial launch company on the planet, and they’re running Starlink as a real business that is generating cash, with the value of their listing said to be discussed as high as $1.75 trillion in advance.
Other than when it comes to valuations, which is when there is little to no margin for error, and Starship hasn’t been flawless. A test flight was aborted mid-July due to multiple engine failure to ignite. That is the type of headline people who are already freaked out about paying multiples to space-company stocks for a hardware company with real technical risk at the heart of their long thesis are going to be scared of.
Not to mention that there is a structural catalyst coming that I think is not really being talked about. SpaceX will release up to 900 million shares of itself up to 20% of the total number of locked shares, which is a major unlock event for the company, on August 6. Another 10% will be unlocked if the stock is trading above $175.50 for five of ten trading sessions. I’ve seen so many IPOs get past the lockup period that I know that it provides real selling pressure, even if the company is doing well, just because they finally have the opportunity to sell some chips that have been locked up for years.
The Tesla Story Is Genuinely Different, And Harder To Call
The issue isn’t whether or not the tech works for Tesla. The automotive business continues to account for approximately 70% of company revenue, and it is performing relatively well. Morgan Stanley increased its projection for 2026 sales to 1.67 million from 1.57 million, and 2027 to 1.86 million from 1.82 million, in part due to the unpublicized effects of post-conflict gas price increases on EV demand. Energy storage deployment reached a new high of 8.8 gigawatt hours in Q1, as gross margin on the segment rose to an all time high of 39.5%. It’s a serious, viable, expanding company inside of Tesla that no one is talking about because everyone’s in the robot/taxi bubble.
The issue is what Wall Street is basing the stock value on. As the stock market is increasingly driven by robotaxi and humanoid robot progress instead of core auto fundamentals, the speculation on SpaceX integration is just an additional premium layer, as described by Tom Narayan at a big bank recently. The total capex for Tesla in 2026 is projected to be more than $25 billion, with most of that investment dedicated to AI systems that are vital to Cybercab production and Optimus, rather than to increased car sales.
That’s a gamble on an uncertain future based on negative cash flow. The numbers from Morgan Stanley’s own data on the robotaxi fleet are a testament to the early stage that this is. The existing fleet is anywhere from 50 to 150 cars, and is limited to just Austin and the San Francisco Bay area, far below the eight metro areas that Musk had pledged by the end of 2025. I think that’s a big number compared to the 2026 projection of around 1,000 vehicles, but it’s a very small number when compared to a $25 billion capex budget.
Head To Head, The Numbers That Actually Matter
| Metric | Tesla (TSLA) | SpaceX (SPCX) |
|---|---|---|
| 2026 YTD Performance | -30%, worst mega-cap performer | -28%, trailing peer group |
| IPO / Public Status | Long established, public since 2010 | IPO’d June 12, 2026 at $135, closed day one at $160.95 |
| Core Cash-Generating Business | Autos (~70% of revenue) plus fast-growing energy storage | Starlink subscription and commercial launch revenue |
| Speculative Growth Bet | Robotaxi (Cybercab), Optimus humanoid robots, AI chip fab | Starship full reusability, deep space missions, AI compute deals |
| 2026 Capex | Expected to exceed $25 billion | $3 billion R&D on Starship program reported for the prior year alone |
| Near-Term Overhang | Negative free cash flow, delayed robotaxi rollout timeline | August 6 insider share unlock, up to 20% of locked shares |
But where does TQQQ fit into this discussion?
I’ll cut to the chase with something that many of my readers ask me. So, if you are a TQQQ holder for leveraged exposure to the Nasdaq-100, then those 30% losses on Tesla have definitely been a drag on TQQQ’s performance this year, considering the fund’s 3x daily leverage mechanics I mentioned previously in a StockVane article. As a relatively new IPO in June 2026, SpaceX has not yet been listed on the Nasdaq-100, so there is no intrinsic volatility from SpaceX yet impacting TQQQ returns. That might evolve over time if SpaceX is eventually rebalanced in the index, which would be an interesting exposure scenario for those with an interest in tracking TQQQ’s forward composition risk, but for now, it’s a question of exposure arising from Tesla, not Musk.
My Actual Take, For What It’s Worth
After sitting with both earnings reports for awhile I have this honest, personal take. I don’t believe the selloff of either stock is related to the loss of Musk’s touch; I believe it’s more about the market’s lack of faith in the companies. I believe it’s two companies at the same time trying to get growth-stock multiples from the public markets at a time when interest rates and risk appetite were becoming a little bit more stingy.
SpaceX’s clean cash generation story is Starlink, but it is brand new to public markets, has a real technical risk with Starship that just came out of a failed test, and has a lockup that unlocks next week that I would expect to put pressure on it no matter how its underlying business performs. Tesla has a much broader, deeper existing business, a truly great and underrated energy storage business, but is spending money at a rate that makes its stock price almost entirely reliant upon robotaxi and Optimus delivering on a schedule that is now delayed by a year.
Looking at it literally, if I had to pick one, it would be SpaceX because Space Infrastructure hasn’t yet reached the stage where anyone is asking, what is the total addressable market? (TAM), while Starlink is clearly revenue now. I will not put my hand anywhere in either of these on valuation discipline, and if you already have a Nasdaq-100 vehicle, such as TQQQ, in which to invest in Tesla, you know exactly what you are getting and why it has been dragging on your returns this year. It’s not a way of being safe if you’re wrong, it’s a way of knowing what you do have.
