Tesla and SpaceX Shares Fall as Musk's Nearly $500 Million Midterm Bet Backfires

Elon Musk spent nearly $500 million to elect Republicans in the 2026 midterms, according to FEC filings reported by Forbes, making him the cycle's largest individual donor by more than a factor of three. The bet failed: of every traceable dollar Musk put into a race that has been decided, more than 99 cents went to a race he lost, according to a WIRED analysis.

His two public companies traded lower while the market rallied. Tesla (TSLA) fell 4.3% to a two-week low and SpaceX (SPCX) dropped 4.6% to an over two-month low after the Democratic sweep. Per SentiSense price data, Tesla closed Wednesday down 3.3% at $385.19 and SpaceX down 3.8% at $135.92.

Texas is where the loss could matter most for the businesses. Musk routed around $225 million into the state's races, and Democrats won the governorship, where Gina Hinojosa campaigned on a temporary data center moratorium. Come January, Democrats will hold sway over more than $1.6 billion in tax incentives overseen by the governor's office, as well as policy touching a SpaceX chip plant the state valued at more than $16.8 billion, Tesla's robotaxi fleet and the Starbase launch site. SpaceX's Terafab project in Grimes County could cost as much as $119 billion, and its plan to add 10GW of AI compute by the end of next year now looks harder to achieve, The Motley Fool argued.

The election lands on a stock that was already under pressure. SpaceX shares fell 17.8% over the past month despite third-quarter revenue growth of 161.4% and a swing to $4.40 billion in net income, as investors weighed $48.07 billion of capital spending in nine months against $13.10 billion of operating cash flow. Points to watch are any Texas moves on data center permitting and incentives, and whether the result complicates a combination of SpaceX and Tesla, which The Motley Fool flagged as a possible casualty.