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Call it the Musk selloff. Shares of Tesla and SpaceX plunged on Thursday, deepening a rout that began the moment the midterm results became clear — and across just two trading days the two companies have lost roughly $456 billion in combined market value, according to Dow Jones Market Data. It was the worst single-day decline for both stocks since March 2020.
The scale of the wipeout
The numbers are stark. Tesla fell about 11% on Thursday to close the session sharply lower, after dropping 3.3% on Wednesday; SpaceX fell about 9% on Thursday after a 3.8% decline the day before. Over the two sessions, Tesla erased about $216 billion in market value and SpaceX about $240 billion — roughly $456 billion combined. CNBC, measuring from Tuesday's close, put the combined loss at more than $420 billion. Either way, it is one of the largest two-day destructions of shareholder wealth ever recorded for a single founder's empire.
Musk himself has felt it directly. According to Forbes, his net worth now stands at about $789.5 billion — down roughly 9% on Thursday alone, and about $90 billion lower than a week ago. He remains the world's richest person, but his fortune has fallen back below $800 billion after passing $1 trillion following SpaceX's initial public offering in June. SpaceX, meanwhile, is now trading below its $135 IPO price.
Why investors are running
In one word: politics. Democrats won control of both the House and the Senate in the midterms, and Musk — the biggest individual donor of the 2026 election cycle, having spent $445.7 million mostly supporting Republican candidates, according to OpenSecrets — is now a likely target for congressional probes. Investors fear new investigations into Musk and tighter regulation of his companies, just as both are making enormous bets on artificial intelligence.
Deutsche Bank analysts warned that SpaceX faces additional headwinds in Texas, where the company and Tesla are building AI infrastructure, and that tighter data-centre rules could delay projects or raise costs. SpaceX committed last month to a roughly $40 billion lease for AI chips, with payments starting in the first half of 2027. As one portfolio manager put it, Tesla and SpaceX are "a 2-for-1 special as the market attempts to re-price the risk of a material slowing in data center buildouts."
Part of a much bigger selloff
The Musk selloff did not happen in isolation. Thursday was the Nasdaq's worst day in 18 months as investors dumped chip and data-centre stocks on fears that new leaders in Washington and the states could slow data-centre construction. Nvidia lost $447 billion in market value on Thursday — its second-largest one-day decline on record, according to Dow Jones Market Data. The fear is the same across the sector: that the AI spending boom, built on cheap power and light-touch permitting, is about to meet a much harsher political climate.
There is also a structural question hanging over both companies. Tesla and SpaceX are in early talks to combine into a single company that would be heavily controlled by Musk — what some have called "Elon, Inc." — which would concentrate even more risk in one individual. As one analyst noted, the selloff reflects investors actively repricing the hazards of linking so much of an investment case to a single person.
What to watch next
Whether this is a buying opportunity or the start of a longer repricing depends on what Democrats actually do with their new majorities — and on whether the AI buildout slows. The fundamentals have not collapsed: SpaceX reported $2.79 billion in operating income last quarter. But the political premium that lifted both stocks after the midterms' eve has now reversed violently. For the wider market context, see our reports on Wall Street's split reaction to the midterms and the Nasdaq slide into correction territory.