SpaceX's IPO Could Leave Tesla Eating Rocket Dust

Tesla's biggest problem may no longer be Chinese competitors, slowing demand for its EVs or the still-theoretical payoff from robotaxis and humanoid robots.

It might be SpaceX.

If Elon Musk's rocket and satellite-internet company goes public at anything close to the rumored $1.75 trillion valuation, it will not just be one of the biggest IPOs in history. It will give Tesla investors tired of waiting for the CEO's promises to materialize something they haven't had in a while: a potentially bigger, more exciting way to invest in the Musk myth. Certainly, SpaceX, with its reliable and steady leadership under long-time president Gwynne Shotwell, is shaping up to be a shinier proxy -- with fewer close competitors or awkward quarterly questions about exactly when Tesla can take on Waymo in self-driving tech or actually deliver its C-3PO-style robot.

"There are many Tesla investors who perceive SpaceX to be a better investment for many reasons," Ross Gerber, a Tesla investor and CEO of Santa Monica, California-based Gerber Kawasaki, which manages over $4 billion, told Forbes. "If I sell my Tesla shares, nobody's going to argue that it's not overvalued. And if I want to buy the sizzle, I'm going to buy SpaceX. And that's what people want to do. A lot of people think this is going to be easy money."

For the latest in cleantech and sustainability news, sign up here for our Current Climate newsletter.

That's largely because, despite Tesla's continued profitability, it's undergoing a fundamental shift from the business that built the brand-electric vehicle sales-which have plateaued as it waits for new AI-oriented ones to kick in. That was underscored this week with the Austin-based company's first-quarter results. Net income rose to $477 million, up 16% from a year ago when the brand was stung by anti-Musk protests and reduced Model Y SUV production as it shifted to an updated version. But that's far below profit in the three previous quarters, including $844 million in 2025's final three months. The company's battery business, a bright spot last year, contracted in the first quarter, down 12%. Overall revenue rose 16% to $22.4 billion, but that was also below the level of the past three quarters.

"What we're seeing with Tesla is a brand where belief is doing more work than strategy-and the real test is how long that dynamic can hold"

Tesla didn't report any revenue from its tiny robotaxi fleet, which operates mainly in Texas with human safety drivers at the wheel. Likewise, it had no revenue from Optimus robots in the quarter, another hoped-for revenue stream, as they're not yet in production.