Down heavily in 2026, it doesn’t seem controversial to state that Tesla (NASDAQ: TSLA) stock isn’t particularly well-loved by investors right now. Despite initially soaring, newly-listed SpaceX (NASDAQ: SPCX) is now experiencing similar momentum.
So, which might be the better buy today?
Show me the money!
One surely uncontroversial advantage Tesla has over SpaceX is that the former actually makes money overall. Indeed, it posted its first annual profit back in 2021.
Another attraction is that this company’s earnings are becoming increasingly diversified. While its cars, robotaxis and Optimus robots consistently grab the headlines, Tesla’s energy storage business has also been growing significantly.
But this is far from a risk-free proposition. AI-related spending is going to keep rising. Indeed, Tesla’s capital expenditure in 2026 is expected to be over $25bn.
This comes as margins have been shrinking and the firm faces increasingly stiff competition from Chinese manufacturers.
Back to reality
In sharp contrast, Elon Musk’s space exploration company is largely devoid of rivals. Both its Starlink satellite business and launch services are booming, helped by the barriers to entry into this line of work being so incredibly high.
But there’s a familiar downside to all of this, namely the massive amount of cash SpaceX will need to get even slightly close to its long-term goals. These include the development of Starship and orbital data centres.
And even if everything goes to plan, it will take an equally enormous amount of time to get there. That level of patience might be hard to come by for a lot of growth-focused investors who have become accustomed to seeing their portfolios consistently rising/soaring in value in recent years.
The Musk Effect
We can’t ignore the elephant in the room any longer either, namely the man at the top.
Depending on your opinion of him, the fact that Musk controls both companies either inspires excitement or terror (or perhaps both). Regardless, it suggests that the movement of one stock might become increasingly correlated with the other. This could prove beneficial for holders if things go well. But the opposite could also happen, depending on what their (unpredictable) CEO says and does next.
Naturally, both could do everything right from here and still suffer if the market suddenly takes a very dim view of tech stocks in general.
Here’s what I’m doing
Pushed for an answer, I’d speculate that SpaceX has better long-term prospects to consider thanks to its competitive edge. But this is oversimplified, finger-in-the-air stuff. Considering the lofty ambitions of both, how can it be anything else?
It may also prove irrelevant if these businesses are eventually merged, as many market commentators predict.
Personally, I’m still content to get my exposure via diversified exchange-traded funds, if only to cushion the (inevitable) bumpy ride ahead. I suspect there are plenty more share price moves like those we’ve already seen to come.
As far as backing individual companies is concerned, I also think there are far cheaper, far less volatile, far less stressful opportunities to think about elsewhere in the stock market.
If we’re talking investment over something akin to gambling, these feel like the real ‘better buys’ to me.
Should you invest £5,000 in SpaceX right now?
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Paul Summers has no position in any of the shares mentioned
This story originally appeared on Motley Fool
