Shares of Elon Musk’s two biggest companies sold off sharply in the days immediately after the 2026 U.S. midterm elections, with the combined Tesla and SpaceX market cap losses topping $420 billion as investors weighed the prospect of new congressional investigations and tighter regulation. SpaceX and Tesla shares declined by about 9% and 11%, respectively, on Thursday afternoon, according to CNBC, which reported the drop in SpaceX market cap and Tesla’s slide as part of a broader technology sell-off.
Two Sessions Erase More Than $420 Billion
CNBC reported that the declines, which correlated with a broader tech sell-off, brought aggregate market cap losses for SpaceX and Tesla to over $420 billion since Tuesday’s close. By the close of business on Thursday, the figure had grown: the two companies had lost about $456 billion in market value, according to the same report.
The slide also dented the personal fortune of the world’s richest man. Musk’s wealth, which had topped $1 trillion after SpaceX’s initial public offering in June, is now down below $800 billion, having dropped about $90 billion in the past week, according to Forbes figures cited by CNBC. He remains the richest person in the world.
Why the SpaceX Market Cap Moved on Election Results
The selling followed a decisive set of results in the midterm elections. Democrats won control of both the House and Senate, a shift that gives the party subpoena power and control of committee agendas — and, in the view of investors cited by CNBC, raises the odds of new scrutiny of Musk’s businesses and stricter rules governing them.
Musk was the single biggest donor to GOP candidates and causes in the midterms, with financial contributions exceeding $470 million, a total the Financial Times first reported. Despite his bolstering the GOP war chest, most of the candidates Musk backed lost their races.
The outcome was particularly striking in Texas, where both Tesla and SpaceX are headquartered. Democrats Sen.-elect James Talarico and Gov.-elect Gina Hinojosa beat longtime Musk allies, state Attorney General Ken Paxton and Gov. Greg Abbott.
Deutsche Bank Flags Headwinds for Texas Compute
Deutsche Bank analysts addressed the shifting political backdrop in a note published Wednesday, writing: “While policy is naturally hard to predict, we could envision SpaceX facing some incremental headwinds in this type of backdrop.”
The analysts singled out the incoming Texas governor’s platform. Gov.-elect Hinojosa “made data centers a major campaign issue,” they noted, calling for “a moratorium on new approvals until the legislature passes stronger protections on water use, electricity costs, local control, and incentives,” and criticizing tax breaks for large facilities.
That matters because Tesla and SpaceX are both building out AI infrastructure in Texas. The two companies are planning to build Terafab, a massive facility that will include a data center and sprawling semiconductor factory, in Grimes County, Texas. SpaceX also plans to build out a “supercomputer” at its Starbase, Texas, launch facility and company town, according to company job listings.
Deutsche Bank analysts wrote that SpaceX’s Texas compute capacity could now be at risk of delays, and that capital expenditures by the company may need to increase to meet the requirements of tighter, anticipated regulations around data center buildout.
Local resistance to large computing campuses has been building well beyond Texas. A review of public filings found that comments submitted on proposed projects ran overwhelmingly against them, as detailed in our report on data center public comments, while the energy demands of AI facilities have become a separate flashpoint, covered in our reporting on AI data centers and U.S. climate progress.
Starlink Records in Ukraine Under Review
A second source of pressure concerns Ukraine. Musk and SpaceX have been instructed to preserve records concerning restrictions imposed on a military version of the Starlink satellite internet service in Ukraine, CNN first reported, citing an aide to a Democratic senator. The restrictions hampered the country’s ability to defend against attacks by Russia, CNN reported.
Preservation instructions of that kind typically precede formal inquiries, and the request underscores the kind of oversight investors appear to be pricing into the SpaceX market cap. Starlink terminals have been central to Ukrainian military communications as the country defends its territory and sovereignty against Russia’s invasion.
A Tesla-SpaceX Merger Gets Harder
CNBC also reported that regulatory scrutiny could block chances for Musk to merge SpaceX and Tesla, an idea he has promoted while acknowledging that shareholders’ approval would be required first. A combination of the publicly traded automaker and the space and satellite company would require antitrust and securities review, and a less sympathetic Congress narrows the political room for such a deal.
Thursday’s losses landed against a jittery backdrop for large-cap technology stocks, which have faced repeated questions this year about the pace and cost of the AI buildout — pressures NarwhalTV examined in its coverage of tech stocks and AI scrutiny.
For now, the scale of the move is the clearest signal. Two trading days after the midterm elections, roughly $456 billion of combined value had come off the two companies by Thursday’s close, and the SpaceX market cap — which only became a public-market number after the June IPO — is being tested for the first time against a Congress controlled by the opposing party.
