Investors looking to gain exposure to Elon Musk's ventures face a choice: is it better to invest in SpaceX or Tesla Motors (TSLA)?
Recent market activity suggests an answer. On Monday, shares of the electric vehicle maker Tesla Motors rose 1% to $405.05, while SpaceX shares plunged 16% to $154.60, marking their third consecutive day of declines.
This drop is partly due to a post-listing valuation correction common for new listings. Furthermore, SpaceX's recent announcement of a large post-IPO bond offering highlights the capital-intensive nature of its business. A growing market view suggests that Musk's various companies may eventually merge. If this prediction holds, investing in Tesla Motors could offer a lower-cost entry point into Musk's future commercial empire.
Both companies trade at price-to-earnings ratios far above their industry peers, buoyed by the "Musk premium." However, SpaceX's valuation is exceptionally high. With 2025 revenue of $18.7 billion, it trades at over 100 times earnings. In contrast, Tesla Motors, with annual revenue of $95 billion, trades at a P/E ratio of only about 14.
Bullish SpaceX investors argue they are betting on Musk's grand vision: building data centers orbiting Earth and establishing large human settlements on the Moon and Mars. Yet, Musk's ambitions for Tesla Motors are also vast. Late last year, he suggested the company's Optimus humanoid robot could "eliminate poverty," make work optional, and provide top-tier healthcare for all.
Beyond market sentiment, the arbitrage window between SpaceX and Tesla Motors may be short. Before SpaceX's listing, Musk and executives like President Gwynne Shotwell hinted at a potential future merger. Musk has a history of rapidly integrating his companies, as seen in early 2025 when SpaceX, xAI, and platform X were separate private entities. The two firms already share some employee resources and collaborate on projects like intelligent agents and chip wafer fabs, creating mutual benefits.
For investors seeking a stake in Musk's business landscape, buying Tesla Motors shares currently appears to be the option with greater growth potential.
Artificial Intelligence and the Film Industry
Major developments are occurring in Hollywood's AI investment scene.
Reports indicate that Alphabet (GOOGL) invested $75 million in the popular independent film production and distribution company A24 on Monday. A24 produced the hit theatrical film "The Backrooms." Alphabet's press release offered few details, stating only that "this collaboration marks the beginning of a joint development effort, grounded in technological research and innovative exploration," without specifying the cooperation's exact nature.
The partnership will involve DeepMind developing tools for filmmakers, but Alphabet will not gain access to A24's user data or its film and series library. Despite this, many film fans have criticized A24 on social media for aligning with a major tech giant, echoing the public backlash when venture capital firm Thrive Capital invested in A24 two years ago.
There is widespread concern that tech companies are increasingly influencing the film industry. Amazon MGM Studios previously shelved a film critical of OpenAI and its CEO Sam Altman, a move that heightened public anxiety, especially given Amazon's $50 billion investment in OpenAI just months earlier.
However, there are signs that AI capital has not completely eroded creative independence in film. According to Variety last weekend, streaming distributor Mubi is expected to take on the distribution of the OpenAI-themed film. Sequoia Capital, a major investor in Mubi, is also an investor in OpenAI.