Investors in Tesla Inc. are facing a new choice as Space Exploration Technologies Corp., or SpaceX, prepares for an initial public offering. For years, Tesla shares were the main way to invest in Elon Musk’s ventures. The SpaceX IPO introduces an additional entry point into Musk’s network of companies.
Tesla shares have declined 8.8% in 2026 after surging 265% from early 2023 to late 2025. Despite this, Tesla trades at nearly 196 times earnings over the next 12 months. The valuation is largely based on future expectations of autonomous vehicles, robotics, and EV expansion.
Analysts note slowing sales growth and increasing competition from Chinese EV makers and traditional US automakers. Tesla’s robotaxi projects also face rivals such as Alphabet Inc.’s Waymo and other tech firms developing humanoid robots.
Joe Gilbert, Portfolio Manager at Integrity Asset Management, said, “This cannot be a positive for Tesla. Musk’s focus will predominantly be lasered on SpaceX.” Reports suggest that Musk may consider merging Tesla and SpaceX, partly to address overlapping investor attention.
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SpaceX is positioned differently from Tesla, operating in the space launch and exploration sector. The company has few direct competitors and appears to have expansive growth potential. Gilbert added, “We expect SpaceX to come to market with an astronomical valuation, pun intended. It has no true competitors.”
SpaceX’s IPO may exceed Tesla’s market capitalization, according to estimates, offering investors exposure to Musk’s space ambitions. Retail investors, who hold about 40% of Tesla shares, may split their allocations between the two companies. James Picariello of BNP Paribas noted that the IPO could ‘split the pro-Musk retail shareholder base.’
Ivan Feinseth, chief Investment Officer at Tigress Financial Partners, observed that the IPO could “strengthen the broader ‘Musk ecosystem’ narrative.” Roundhill Financial CEO Dave Mazza added, “Tesla and SpaceX are fundamentally different businesses, and investors who believe in Musk’s vision will want exposure to both.”
Early trading effects of the IPO could take around three months to fully influence Tesla shares, said Nicholas Colas, Co-Founder of DataTrek Research. He noted that Tesla’s valuation relies heavily on anticipated future performance rather than current results.
“For Tesla, it has been 90-10 future-to-present value for as long as I’ve looked at it,” Colas said. Musk’s dual leadership could complicate investor focus, as capital and attention might rotate toward the newer SpaceX IPO.
Colas highlighted that SpaceX has ‘a more clear, competitive advantage in its core business’ compared to Tesla. He also indicated that merging the companies might simplify the market’s approach to owning Musk’s vision.
Founder-led companies often attract high investor attention and retain strong valuations. Bain & Company research shows such firms can deliver roughly double the returns of non-founder businesses.
Investor demand has supported the SpaceX IPO despite its high whispered valuation of $1.75 trillion. The market treats Musk’s ventures as one-way growth bets, particularly in space exploration and artificial intelligence.
The upcoming IPO tests whether investor enthusiasm will spread across Musk’s companies or favor SpaceX. Historical patterns suggest that even leading positions can shift quickly when valuations are heavily based on future potential rather than current operations.