July has been a horrible month for the stock prices of Elon Musk’s two publicly traded companies: Tesla (Nasdaq: TSLA) and SpaceX (Nasdaq: SPCX).
As of the close of markets yesterday, the two companies have seen their stock prices decline by roughly 24% and 31%, respectively, since June 30. Here’s what you need to know.
Tesla stock got hammered yesterday
Let’s start with Tesla, Inc. While the electric vehicle company has seen its stock price decline for most of July, the drop had been subtle, and similar to what most major tech stocks had seen across the month.
However, then yesterday came, and TSLA stock crashed more than 14.5% in a single trading session, ending the day down $54.32 to $319.69.
So what the heck happened? In short: Tesla’s earnings happened.
Yesterday, the company revealed its financial results for the second quarter of fiscal year 2026. For the quarter, Tesla reported revenue of $28.24 billion, representing roughly 26% growth from the same quarter a year earlier.
That type of growth is nothing to sneeze at, and, as noted by CNBC, Tesla’s Q2 revenue came in well ahead of the $25.71 billion LSEG analysts were expecting.
But revenue is only one slice of the pie. Unfortunately for Tesla, actual earnings were much weaker than expected.
The LSEG consensus was that Tesla would report an adjusted earnings per share (EPS) for the quarter of 51 cents. Instead, the company actually reported an adjusted EPS of 33 cents. For the quarter, its total net income declined by about 5% versus the same quarter a year earlier to $1.11 billion.
This earnings decline was the result of numerous factors, including discounted pricing on its vehicles in an effort to boost sales and a decline in regulatory credit revenue.
But this wasn’t the only thing that seemed to spook investors.
Tesla also revealed that its capital expenditure (capex) for the quarter surged 142% to $5.79 billion, driven in part by spending on AI infrastructure and robotics R&D.
For the quarter, this also led to a negative free cash flow of $1.1 billion.
Tesla isn’t the only company throwing piles of cash at AI buildouts. However, investors have recently begun to express increasing concern over such spending and whether it will eventually pay off.
SpaceX’s stock price decline has been more gradual
Now for SpaceX. Yesterday, the company’s stock price fared better than Tesla’s. It closed out the trading day up nearly 2.6% to $118.24.
However, that’s where the good news ends for SpaceX’s stock price. While Tesla’s stock price fall was sharp and dramatic yesterday, SpaceX’s fall has actually been worse—it’s just happened more gradually over a period of weeks.
As of yesterday’s closing price of $118.24, SpaceX is now well below its all-time high of $225.64 on June 16 (about 44% lower), well below its opening public trading session price of $150 (down about 21%), and even well below its IPO price of $135 (down about 12.4%).
Since June 30, the stock has fallen more than 30%. The question is why?
The answer is more complicated than it is for Tesla, as there is no one set of financial results that has spooked investors. Instead, it’s numerous factors.
Perhaps the most obvious is that even before SpaceX held its IPO, many analysts voiced concerns that SpaceX was massively overvalued. And that’s before the stock surged from $150 per share to above $225 in just a matter of days after its IPO.
Its decline since that peak could be due to many factors, including profit-taking and a growing sense that the company’s fundamentals don’t justify such a high valuation.
July has also seen some setbacks for the company. On July 16, its Starship Flight 13 was aborted after engine failures, and on July 20, a Falcon 9 Starlink launch was aborted at the last moment, too.
These (albeit temporary) failures are obviously going to lead some investors to scrutinize the company and its stock price prospects more closely.
Where do TSLA and SPCX stock go from here?
Where either stock goes from here is impossible to predict.
After yesterday’s massive selloff, TSLA shares are currently trading up about 1% in premarket trading this morning. SPCX shares are currently down about 1%.
Tesla investors will probably have to wait three more months to get a fuller financial picture of the company. Tesla should announce the results of its current Q3 around late October.
As for SpaceX, the company is expected to announce its first financials as a publicly traded entity on Tuesday, August 4. Investors will be keenly scrutinizing those results to determine whether the company’s stock price reflects its underlying financials and future potential.
Just two days later, on August 6, the first tranche lockup of SpaceX shares also expires, meaning that’s when employees and pre-IPO investors can legally sell some of their shares. Many speculate that this lockup expiration could lead to a glut of SpaceX shares flooding the market, driving the company’s stock price down further.
Whether that happens remains to be seen.
