All eyes have been on SpaceX (NASDAQ:SPCX) stock this summer, leaving Tesla (NASDAQ:TSLA) to take a back seat. Yet both Elon Musk-run companies remain at the forefront of massive global tech trends like AI and robotics.
And with SpaceX and Tesla down 52% and 37% respectively from their 52-week highs, now could be a great chance for me to buy these stocks. But which one do I prefer today?
The case for Tesla
Despite a recent slowdown in sales, Tesla remains the best-known EV brand globally. Yet the investment case doesn’t really rely on selling more cars to consumers. That’s too mundane for Musk.
Instead, the firm wants to be judged as an AI and robotics platform. Specifically, for fully autonomous robotaxis and general-purpose humanoid robots (called Optimus), which Tesla aims to sell to factories, warehouses, and eventually households.
Sounds exciting, I have to admit. The problem I have, though, is that Optimus is a couple of years away from mass production while the robotaxis face huge competition from Waymo in the US and Chinese rivals overseas.
Meanwhile, Tesla’s Q2 operating margin dropped significantly despite posting record vehicle deliveries and revenue. In the earnings report, it wrote: “Scaling will be non-linear, and we are focused on long-term value creation.”
That first bit worries me as a potential investor because I interpret it as saying that financial performance could go backwards before (potentially) going forwards. As such, the stock feels like a coin toss today.
This view is intensified by the valuation, with Tesla trading at a steep 159 times forward earnings.
The case for SpaceX
Turning to SpaceX, I see this as a different beast altogether. In 2025, it did a record 165 Falcon 9 flights, more than any other rival by a wide margin.
However, the key thing to note was that most of these launches involved satellite deployments for its own Starlink internet business. This is the profitable engine of SpaceX today, with subscribers now totalling around 13.6m.
Looking ahead, Wall Street is forecasting tremendous growth. Revenue is tipped to jump from $18.7bn last year to approximately $140bn in 2028. That’s a compound annual growth rate of 95%!
Unlike Tesla, SpaceX doesn’t have any meaningful competition today. And if it can get its massive reusable Starship rocket working, then its competitive advantages deepen even further, as the cost of getting infrastructure into space will plummet.
SpaceX is targeting around $100 dollars per kilogram to low Earth orbit. If achieved, that would not only expand the launch market. It could open the door to an entirely new space economy.
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The biggest risk is ongoing bottom-line losses due to massive AI investments. And with SpaceX sporting a colossal $1.4trn market cap today (larger than Tesla’s $975bn), there’s little room for growth or operational setbacks.
My decision
Weighting things up, I prefer SpaceX. But recent reports say that Tesla may sell its China operation to facilitate a merger between the two. While Musk denies this, I’m not sure what business I would ultimately be investing in with either stock today.
That’s not to say I wouldn’t be interested in investing in SpaceX at some point. The rocket pioneer reports Q2 earnings tomorrow (4 August), so I’ll digest that before deciding on anything.
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Ben McPoland owns shares in Scottish Mortgage.
This story originally appeared on Motley Fool
