U.S. tech giants rose collectively, but Tesla and SpaceX under Musk moved in the opposite direction.
On November 4, U.S. Eastern Time, the results of the U.S. midterm elections gradually became clear, and the three major U.S. stock indices closed higher collectively. According to BiyaPay market data, the Dow Jones Industrial Average rose 3.03%, the S&P 500 Index rose 1.58%, and the Nasdaq Index rose 1.44%.
But Tesla (TSLA) closed at $385.19 that day, down 3.34%; SpaceX (SPCX) closed at $135.92, down 3.81%. As of 19:59 that evening, some after-hours quotes showed that the two companies' prices had further fallen to $381.30 and $134.01.
On one side, the broader U.S. stock market rose; on the other, the stocks of two companies under Musk came under pressure. This divergence has led the market to re-examine a question: after the U.S. midterm elections, what changes will Musk's business empire face?
Previously, Musk actively participated in U.S. political activities and supported Republican candidates. As Democrats made important progress in this election and the power structure in Congress changed, the market began to focus on possible new variables in government regulation, AI data center construction, and corporate project approvals.
However, simply attributing this round of decline to "Musk's failed political bet" is not comprehensive. What is truly worth analyzing is whether changes in the political environment will affect business operations, and whether the AI businesses of Tesla and SpaceX, which the market had previously placed high hopes on, can be converted into revenue and cash flow as expected.
U.S. stocks surged, so why did Tesla and SpaceX fall behind instead?
Judging from market performance on November 4, a rise in the broader U.S. stock market does not mean that all tech companies will strengthen in sync.
That day, large tech platforms and some consumer and defensive stocks performed relatively prominently, but data center-related companies and some tech supply chain companies came under varying degrees of pressure. Funds did not simply buy the entire tech sector, but were reassessing different companies' growth expectations and policy risks.
Tesla and SpaceX underperforming the broader market that day was also related to this market sentiment.
Although the two companies are respectively involved in electric vehicles, commercial spaceflight, and satellite internet, in recent years they have developed more connections with AI infrastructure and Musk's overall business layout.
Tesla is advancing autonomous driving, Robotaxi, and humanoid robot businesses; SpaceX continues to expand investment in the Starlink network, commercial spaceflight, and AI computing infrastructure. These businesses have long-term growth potential, but they also require continuous capital investment, and actual development depends on technological progress, project approvals, and the pace of commercialization.
Therefore, the market is focused not only on the two companies' current revenue and profit, but also on whether future growth can be delivered. When investors begin to worry about changes in the regulatory environment, slower project progress, or increased capital expenditures, the companies' valuations may come under pressure in advance.
This also means that the decline on November 4 was more like a reassessment by the market of future growth expectations, and does not mean that the fundamentals of the two companies have undergone a fundamental reversal.
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Tesla's real test is when its AI business can deliver profits
Tesla's stock price logic is no longer just about traditional car sales.
The automotive business remains an important foundation of the company's operations, but autonomous driving, Robotaxi, the Optimus humanoid robot, and the energy business have become unavoidable parts of the market's discussion of its long-term valuation.
The problem is that the commercialization progress and profit models of these businesses are not entirely the same.
The automotive business has relatively clear delivery volumes, sales prices, gross margins, and inventory data, and investors can judge operating conditions through quarterly financial reports. But autonomous driving and robotics businesses still require more technical validation, practical application, and large-scale operational data.
Taking Robotaxi as an example, the market is focused not only on whether vehicles can achieve autonomous driving, but also on service scope, operational efficiency, accident liability, maintenance costs, and users' willingness to pay. Even if technological progress is made, it will take time to generate stable revenue.
The same is true for the Optimus robot. Product displays and technical demonstrations can raise market attention, but whether it can ultimately achieve commercialization in manufacturing, logistics, and other scenarios still depends on mass production capability, unit costs, and actual customer demand.
Another factor that cannot be ignored is capital expenditure.
Tesla previously estimated in quarterly documents that capital expenditure in 2026 will exceed $20 billion, with funds used for computing infrastructure, data centers, production facilities, and research and development. This shows that the company is investing more resources in AI and automation businesses, but it also means investors need to pay attention to the time gap between investment and return.
If the commercialization progress of new businesses meets expectations, continued investment may open up new growth space for the company; if technical validation or market expansion is slower than expected, capital expenditure may increase funding pressure for a period of time.
Therefore, when observing Tesla next, one cannot only look at whether the stock price rebounds, but also needs to track vehicle deliveries, gross margins, energy business performance, autonomous driving commercialization progress, and changes in capital expenditure.
SpaceX's AI story is big, but data center expansion also requires clear financial calculations
Compared with Tesla, SpaceX's business structure is more diversified.
Commercial spaceflight and launch services are important businesses, while Starlink satellite internet provides continuously growing connectivity services. At the same time, the company is expanding AI-related businesses and investment in computing infrastructure, attempting to combine satellite networks, computing power, and AI services.
Judging from the latest performance, SpaceX's growth is not just market imagination.
According to Reuters' report on the company's third-quarter performance, SpaceX's third-quarter revenue reached about $14.58 billion, up 161% year-on-year, higher than analysts' expectations; net profit was about $4.4 billion. The company's revenue growth was mainly driven by the expansion of its AI business and the growth of Starlink connectivity services.
From the perspective of business structure, AI-related superintelligence businesses have become an important source of growth, and connectivity services such as Starlink also provide the company with revenue and operating profit support.
But rapid revenue growth does not mean that future expansion will be cost-free.
SpaceX's third-quarter capital expenditure was about $19.593 billion, of which AI-related capital expenditure accounted for a large proportion. Capital expenditure is investment used to build and purchase long-term assets, and is not equivalent to current operating expenses, nor can it be directly subtracted from revenue to judge whether the company is losing money.
What really needs attention is whether these investments can be converted into sustainable revenue and cash flow in a timely manner.
The construction of AI data centers requires computing chips, servers, electricity, cooling systems, sites, and many other resources. After equipment is deployed, customer orders and continued use are also needed to gradually generate returns. If construction progress, chip supply, or power support is delayed, funds may already have been invested while revenue realization may be postponed.
This is also why, after Democrats made progress in the election, the market will reassess the policy environment facing U.S. AI infrastructure projects.
Data center construction involves energy consumption, land use, community impact, and environmental regulation. If local governments impose stricter approval requirements on new projects, the construction cycles and operating costs of relevant companies may be affected.
However, higher regulatory requirements do not mean projects will definitely stall. SpaceX still has different businesses such as commercial spaceflight and Starlink, and one cannot ignore the operating value of other businesses just because AI infrastructure faces policy uncertainty.
Institutions raised SpaceX profit forecasts, so why is the stock price still under pressure?
In this round of trading, there is another noteworthy contrast: SpaceX's stock price fell, but some institutions were raising their long-term growth forecasts for the company.
According to a report relayed by Investing.com, Morgan Stanley analyst Adam Jonas recently raised forecasts for SpaceX's future revenue and operating profit, and moved forward the expected time for the company's free cash flow to turn positive from 2035 to 2031, while lowering previous estimates of external financing needs.
This adjustment is mainly based on growth expectations for the company's AI business, satellite connectivity services, and commercial spaceflight business.
But it is necessary to distinguish that institutional forecasts are not operating results the company has already achieved. An earlier free cash flow turning point does not mean that SpaceX can currently fully rely on its own cash flow to support all future expansion.
Institutional models are usually adjusted based on factors such as revenue growth, profit margins, capital expenditures, and financing needs. As long as one of these key assumptions changes, future valuations may be adjusted accordingly.
This is also why institutions raising their forecasts and a stock falling in the short term can happen at the same time.
Investors may recognize SpaceX's long-term business space but still worry about the short-term regulatory environment, AI infrastructure investment, and the capital recovery cycle. For companies whose valuations already incorporate a lot of future growth expectations, the market tends to focus more on the pace of delivery.
Therefore, to judge SpaceX's subsequent trend, one cannot only look at the target prices given by institutions; it is even more necessary to observe whether AI business revenue continues to grow, whether Starlink users and service revenue expand, and whether capital expenditures can gradually translate into stable operating returns.
Potential merger between Tesla and SpaceX: what do shareholders really care about?
In addition to the election and AI infrastructure, a potential integration between Tesla and SpaceX is also a recent focus of market attention.
Both companies are closely related to Musk's business empire, and there is also some room for imagination regarding business synergies. For example, AI computing power, energy supply, automation technology, and infrastructure construction could all become entry points for outside discussion of a potential integration.
But it needs to be emphasized that discussion of a potential merger does not mean the transaction has been definitively completed.
For investors, the value of a merger cannot be judged only by how large the two companies' businesses are when added together; it also depends on the transaction structure, share exchange ratio, asset valuation, and future funding needs.
If the transaction involves issuing new shares, the shareholding ratios of existing shareholders may change; if there are differences in the capital expenditure and debt structures of different businesses, it is also necessary to consider how resources will be allocated after the merger.
Technical synergies may indeed bring long-term value, but ultimately they still need to be reflected in indicators such as operating efficiency, customer growth, profit margins, and earnings per share.
Before the transaction terms are clear, investors should not treat potential synergies in advance as returns already realized. For Tesla and SpaceX, future stock price performance still needs to return to their respective operating conditions and valuation foundations.
How to view the outlook for Tesla and SpaceX? Focus on three signals
After the decline on November 4, what the market needs to observe next is not only whether the two stocks can rebound, but whether there are new changes in corporate fundamentals and the external environment.
First, whether policy changes truly affect corporate projects
The U.S. midterm elections changed the power structure of Congress, but policy adjustments need to go through subsequent legislative, regulatory, and specific implementation procedures. For Tesla, it is necessary to observe autonomous driving, vehicle regulation, and related project approvals; for SpaceX, attention should be paid to AI data center construction, energy supporting facilities, and the government project environment.
It cannot be concluded solely based on election results that a company has already lost a certain business opportunity.
Second, whether the AI business can continue to deliver revenue
Tesla needs to prove long-term growth expectations with actual progress in autonomous driving, Robotaxi, and robotics; SpaceX needs to observe AI business revenue, Starlink connectivity services, and the operating efficiency of computing infrastructure.
If new businesses continue to expand and gradually form stable profits, the market may gain more support for the company's long-term valuation. Conversely, if capital expenditures continue to increase but revenue and cash flow growth cannot keep up, valuation pressure may continue.
Third, whether the stock price can regain support from trading volume and fundamentals
In the short term, one can observe Tesla and SpaceX's previous lows, changes in trading volume, and the degree of capital participation during rebounds. If the stock price rebounds but trading volume is insufficient, it indicates that market confidence may still be limited; if key price areas are recovered with heavy volume, then one can further observe whether sustained repair appears.
Finally
U.S. tech giants rose collectively, while Tesla and SpaceX fell against the trend. This market divergence reflects not only the political sentiment changes brought by the U.S. midterm elections.
For Tesla, the market is waiting for autonomous driving, robotics, and energy businesses to further deliver on growth expectations; for SpaceX, the rapid expansion of the AI business has brought new revenue space while also imposing higher requirements for capital expenditure and capital recovery.
The long-term development of Musk's companies still has business support worth watching, but whether future valuations can be maintained ultimately depends on technological progress, project approvals, profitability, and cash flow performance.
For U.S. stock investors, what is truly worth tracking is not the rise or fall of a single day, but whether there are continuously delivered operating data behind market expectations.
