Tesla Stock Is Down This Year, and SpaceX Is Volatile. Are Either Worth Owning Right Now?

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 +1.70%) and Space Exploration Technologies Corp (SPCX +0.31%) actually stand.

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.

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.

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.