Tesla, SpaceX shares slide again after Democratic sweep

Tesla ↘ 9.40% and SpaceX shares fell sharply again in early trading on Thursday, Nov. 5. Investors are still weighing what Democratic control of Congress and new Democratic power in Texas will mean for Elon Musk's companies. Tesla dropped 10% shortly after the open, after falling 3.3% on Wednesday, and SpaceX was down 7.5% shortly before 10 a.m., Bloomberg reported. Later in the morning, Yahoo Finance said both stocks were down about 9%.finance.yahoo.com+1

The two companies have lost about $362.5 billion in combined market value over two sessions, Cinco Días calculated. Tesla shares are now down about 23% for the year, according to Bloomberg.bloomberg.com+1

Merger and Data Center Worries

Analysts point to two main risks: a harder path for a possible Tesla-SpaceX merger, and limits on data center construction. "We will believe a SpaceX/Tesla merger happens but now faces a much tougher regulatory roadmap to get this deal done in 2027 given this new political blue roadmap in DC/Texas," Wedbush's Dan Ives wrote on Thursday, Yahoo Finance reported. Goldman Sachs The Goldman Sachs Group, Inc. ↘ 5.48% analysts estimated that Democratic wins at the state and local level could lead to short-term data center moratoria affecting about 45% of planned US data center capacity growth. That is a concern for SpaceX, which increasingly relies on AI computing for revenue.finance.yahoo.com

The merger talks are still at an exploratory stage, and both companies have set up special committees to study a deal, Yahoo Finance reported. Earlier, Bloomberg had reported a push to announce a deal by the first half of 2027 so it could close while President Trump is still in office, according to The Star.finance.yahoo.com+1

Texas Defeat for Musk

Musk spent nearly $450 million backing Republicans, about $205 million of it in Texas, where both companies are based, Cinco Días reported. In Texas, Democrat James Talarico beat Ken Paxton in the Senate race, and Gina Hinojosa defeated Gov. Greg Abbott, Yahoo Finance reported. Hinojosa campaigned on tighter oversight of data centers. Meanwhile, rival electric vehicle makers Rivian ↘ 6.83% and Lucid ↘ 9.50% gained.finance.yahoo.com+1

Broader Tech Selloff

A wider tech slump added to the pressure. As of 10:10 a.m. Eastern, the S&P 500 ↘ 2.83% was down 2% and the Nasdaq Composite had fallen 3.6%, according to the Associated Press. The AP said AI chip stocks fell on concerns that governments could pause data center construction. Nvidia ↘ 6.74% and Advanced Micro Devices ↘ 12.55% led the declines, The Economic Times reported. The drop came a day after the Dow Jones Industrial Average had its best session since April 2025, CNBC Comcast Corporation ↘ 0.56% noted.economictimes.com+2

SpaceX shares kept falling even though Morgan Stanley ↘ 5.63% analyst Adam Jonas raised his SpaceX revenue forecasts to $175 billion for 2027 and $289 billion for 2028, NDTV Profit reported.ndtvprofit.com