SpaceX, Tesla stocks tumble as Democratic sweep raises questions on merger prospects
SpaceX (SPCX) and Tesla (TSLA) stocks extended declines on Thursday, each dropping roughly 9%. Shares of the Elon Musk-led companies were pounded after Democrats won control of the House and Senate this week, raising concerns over regulatory hurdles for data centre buildouts in the US and merger aspirations between the two companies.
"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," Yorkville's partner and managing director Dan Ives wrote on Thursday.
Worries over a slowdown in data centre buildouts also dampened shares of Texas-based SpaceX, which has increasingly leaned into AI compute as a revenue source.
Ives said while Big Tech and hyperscaler capex should still easily exceed $1 trillion in 2027, the growth rate into 2028 "will clearly moderate significantly as the data center buildout comes at a much slower pace given the political map, especially in the state of Texas."
On Wednesday, Goldman Sachs analysts also calculated, "Democratic wins at the state and local level are likely to lead to short-term data centre moratoria, potentially affecting about 45% of planned US data centre capacity expansion.
