Two Musk companies. Two harsh post-earnings reactions. Same summer. I expected the numbers to back up the “Musk’s empire is cracking” narrative when I sat down to write this. Then I pulled them, and the story is less tidy than Twitter makes it. I’ve been getting the same question from readers in a dozen forms, and the honest answer is more interesting than either fan camp wants it to be.
Tesla reported Q2 on the evening of July 22. Revenue beat, and that was about the only clean positive in the report. Free cash flow went negative, expenses jumped, and on the call Musk’s tone was described by more than one analyst as cautious, a shift from his usual confidence about robotaxi progress. Argus Research put it bluntly: consistent profit growth looks close to impossible for Tesla in the near term while so much cash is going into robotaxis, Optimus, and Tesla’s own chip fab. The stock is down about 30% year to date, the worst performer of any individual mega-cap tech name, and not by a little.
SpaceX didn’t get an easier ride. Its first earnings report as a public company, roughly two weeks later, sent the stock down 15%. SpaceX is now off about 28% year to date, trailing nearly every mega-cap it gets compared to.
The easy read is “Musk’s empire is collapsing.” I don’t think the data says that. I think it’s two companies trying to hold growth-stock multiples in public markets at a moment when rates and risk appetite got less forgiving.
The SpaceX story people haven’t fully priced
SpaceX went public on June 12 at $135 a share and closed its first day at $160.95, a 19.2% pop. Every retail investor I know was scrambling for an allocation. The excitement made sense in theory: it’s the dominant commercial launch company on the planet, and Starlink is a real, cash-generating business, with pre-listing chatter putting the valuation as high as $1.75 trillion.
The problem is the same one Tesla has: at that valuation there’s almost no margin for error, and Starship hasn’t been flawless. A mid-July test flight was aborted before launch after multiple engines failed to ignite. That’s exactly the kind of headline that rattles anyone paying a rich multiple for a hardware company with real technical risk at the core of the thesis.
There’s also a structural catalyst that isn’t getting enough attention: an insider lockup expiry on August 6 that frees up to 20% of the locked shares, with another tranche unlocking if the stock trades above $175.50 for five of ten sessions. I’ve watched enough IPOs clear their lockups to know this creates real selling pressure even when the business is doing fine, simply because holders can finally sell stock that’s been frozen for years.
Tesla is a different case, and harder to call
The question with Tesla isn’t whether the technology works. The auto business is still around 70% of revenue and it’s doing fine. Morgan Stanley raised its 2026 delivery estimate to 1.67 million from 1.57 million, and 2027 to 1.86 million from 1.82 million, partly on the effect of post-conflict gas prices on EV demand. Energy storage hit a record 8.8 gigawatt-hours of deployments in Q1, with segment gross margin at an all-time high of 39.5%. There’s a serious, growing business inside Tesla that nobody talks about because everyone is focused on the robots and the taxis.
The issue is what the stock price is built on. The market is increasingly pricing Tesla off robotaxi and humanoid-robot progress rather than core auto fundamentals, with speculation about SpaceX integration layered on as an extra premium, as RBC’s Tom Narayan has noted. Tesla’s 2026 capex is projected above $25 billion, most of it AI infrastructure for Cybercab and Optimus rather than more car production.
That’s a bet on an uncertain future funded by negative cash flow. Morgan Stanley’s own robotaxi data shows how early this is: a fleet of somewhere between 50 and 150 cars, running only in Austin and the San Francisco Bay Area, far short of the eight metros Musk had promised by the end of 2025. That’s a big number next to the roughly 1,000 vehicles projected for 2026, and a tiny one next to a $25 billion capex budget. Analyst targets on Tesla reflect that split.
Head to head
| Metric | Tesla (TSLA) | SpaceX (SPCX) |
|---|---|---|
| 2026 YTD | −30%, worst mega-cap | −28%, trailing peers |
| Public status | Public since 2010 | IPO’d June 12, 2026 at $135; closed day one at $160.95 |
| Core cash engine | Autos (~70% of revenue) plus fast-growing energy storage | Starlink subscriptions and commercial launch revenue |
| Speculative bet | Robotaxi (Cybercab), Optimus, AI chip fab | Starship reusability, deep-space missions, AI compute |
| 2026 capex | Expected above $25 billion | ~$3 billion of Starship R&D reported for the prior year |
| Near-term overhang | Negative free cash flow, delayed robotaxi timeline | August 6 insider unlock, up to 20% of locked shares |
Where does TQQQ fit in
Readers ask this constantly, so quickly: if you hold TQQQ for leveraged Nasdaq-100 exposure, Tesla’s 30% drop has been a drag on the fund this year through its 3x daily mechanics. SpaceX isn’t in the Nasdaq-100 yet, so it contributes nothing to TQQQ’s moves for now. That could change if the index eventually adds it. Today, your Musk exposure through TQQQ is Tesla, not SpaceX.
My take
After sitting with both reports: I don’t think either selloff is about Musk losing his touch. It’s the market losing some faith in the multiples, and repricing two companies that both want growth-stock valuations from public investors just as rates and risk appetite turned less generous.
SpaceX’s clean cash story is Starlink, but the stock is brand new to public markets, carries real Starship technical risk right after a failed test, and has a lockup unlocking within the week that I’d expect to pressure it regardless of how the business performs. Tesla has a broader, deeper existing business and a genuinely underrated energy-storage segment, but it’s spending at a rate that makes the stock almost entirely dependent on robotaxi and Optimus hitting a schedule that’s already slipped a year.
If someone forced me to pick one, it would be SpaceX — because Starlink is revenue today, while the space-infrastructure bet hasn’t even reached the “what’s the total addressable market” stage yet. But I’m not putting money into either on valuation discipline. If you already hold a Nasdaq-100 vehicle like TQQQ, you own Tesla whether you meant to or not, and it’s worth knowing exactly why it’s been dragging on your returns this year.
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