Tesla Stock Falls Nearly 11% to About $344 as Midterm Uncertainty Hits Musk Companies

Tesla shares took a sharp hit on Thursday, Nov. 5, as a broader tech selloff collided with political questions for Elon Musk’s companies after the midterm elections. EconoTimes reported Tesla closed at $343.69, down $41.50, or nearly 11%. CNBC described an afternoon decline of about 11% for Tesla and about 9% for SpaceX; Reuters, carried by Investing.com, likewise said Tesla slumped over 11% while SpaceX slid nearly 9%.

The session extended losses from the prior day. CNBC said the two-day drawdown cut more than $420 billion from Tesla and SpaceX’s combined market value by Thursday afternoon, and about $456 billion by the close. Reuters earlier put the week’s combined hit on track for more than $380 billion while markets were still open.

This article is for information only and is not investment advice.

Why Tesla and SpaceX sold off together

Both companies are headquartered in Texas, which flipped key races Democrats’ way this week. CNBC and Yahoo Finance noted that Sen.-elect James Talarico and Gov.-elect Gina Hinojosa defeated candidates closely associated with Musk’s political spending. CNBC reported Musk was the largest midterm donor to Republican candidates and causes, with contributions exceeding $470 million, and that most of the candidates he backed lost.

Investors focused on two business threads:

1. Data centers and AI compute. SpaceX has leaned into renting computing capacity; Reuters said more than half of its third-quarter sales came from that business. Goldman Sachs analysts, cited by Reuters and Yahoo Finance, estimated Democratic wins at state and local levels could bring short-term data-center moratoria affecting about 45% of planned U.S. capacity expansion. Deutsche Bank, cited by CNBC, flagged that Hinojosa made data centers a campaign issue and called for a pause on new approvals until stronger water, power and local-control rules are in place.
2. A possible Tesla–SpaceX merger. Musk said on SpaceX’s third-quarter earnings call last month that a merger would be a “good idea” and that special committees were exploring a deal, according to Reuters and Yahoo Finance. Yorkville’s Dan Ives wrote that a deal remains plausible but now faces a “much tougher regulatory roadmap” into 2027 given the new political map in Washington and Texas.

Texas projects in the spotlight

CNBC said Tesla and SpaceX are both building AI infrastructure in Texas and planning Terafab, a large semiconductor and data-center complex in Grimes County. Reuters put the planned Terafab cost at up to $119 billion. SpaceX has also posted jobs tied to a “supercomputer” build-out at Starbase, CNBC reported. Deutsche Bank warned those Texas compute plans could face delays and higher compliance costs if regulations tighten.

Separately, CNBC cited a CNN report that Musk and SpaceX have been told to preserve records related to restrictions on a military version of Starlink in Ukraine — another potential oversight flashpoint under a Democratic Congress.

How the move fits the wider market

Thursday’s Tesla drop landed inside a brutal session for growth and AI-linked names. Reuters’ Investing.com wrap listed heavy declines across memory and chip stocks the same day. For Tesla specifically, the price action was about politics as much as semiconductors: dual-listed exposure through SpaceX’s public float, Texas project risk and merger uncertainty all hit at once.

Musk’s personal fortune also moved with the tape. CNBC, citing Forbes, said his wealth had topped $1 trillion after SpaceX’s IPO in June and was now below $800 billion, down about $90 billion in the past week, while he remained the world’s richest person.

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