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AI Drives Sky-High Valuations for SpaceX, Tesla
25 Jun
Summary
- SpaceX's recent IPO valuation surpasses that of Tesla.
- Both SpaceX and Tesla are heavily invested in artificial intelligence.
- Declining auto sales impact Tesla's valuation despite profits.
SpaceX achieved one of the largest IPOs in history on June 12, with its valuation now surpassing that of Tesla. This occurred even after SpaceX's stock experienced a downturn this week.
Last year, Tesla reported a profit of $3.8 billion, while SpaceX incurred a $4.9 billion loss in 2025. Despite Tesla's profitability, both companies trade at extremely high valuations. Tesla's stock is valued at over 370 times earnings, significantly higher than the S&P 500's approximately 32 times earnings.
While Tesla is known for its electric vehicles, with the Model Y being the second-best-selling car globally last year, its auto sales have been declining for several years. SpaceX's market capitalization also seems to exceed the combined total addressable market of its rocket and satellite connectivity businesses.
The primary driver for these elevated valuations appears to be artificial intelligence. Both SpaceX and Tesla have based their business models on AI, a current hot area in the market, leading investors to pay premium prices for companies leading in this field.
