Elon Musk’s two flagship companies, Tesla and SpaceX, faced a brutal week on the stock market, shedding more than $360 billion in combined valuation. Tesla’s shares plunged over 16% while SpaceX’s dropped nearly 7% during the last five trading sessions, sparking a massive selloff among investors.
Tesla’s steep decline wiped out approximately $243.6 billion from its market cap, falling from $1.5 trillion to $1.26 trillion. This downturn was aggravated by the company’s latest quarterly earnings report, released on July 22, which disappointed the market despite beating revenue expectations. The electric vehicle maker reported $28.24 billion in revenue, above the anticipated $25.71 billion, but earnings per share (EPS) fell short at $0.33 compared to the expected $0.51, triggering a 14.52% drop in Tesla’s stock that day.
Meanwhile, SpaceX’s valuation took a hit of nearly $117 billion, sliding from $1.67 trillion to $1.56 trillion. The company's IPO earlier this year was met with initial optimism but quickly faced skepticism. Despite less than $5 billion in revenue and a $2 billion loss in Q1 2026, SpaceX was valued at $1.77 trillion at its IPO, which many analysts argued was overly ambitious. Compared to peers like Broadcom, which generated roughly four times the revenue, SpaceX's massive valuation seemed out of sync with its financials.
As pointed out by Morningstar before the IPO, SpaceX’s stock could fall below $100, moving towards a fair value closer to $70. Yet, the stock managed a positive session recently, indicating some remaining confidence among Wall Street investors.
