SpaceX gave back its profit pop with a 9% drop, and Tesla slipped as investors weighed the Optimus and robotaxi timeline

Elon Musk's companies had a rough Thursday. SpaceX surrendered all of Wednesday's post-earnings gain and more, and Tesla slipped after results that beat estimates but pushed some of its biggest ambitions further out.

SpaceX closed down 9.14% at $144.75, according to Yahoo Finance data. On Wednesday it had climbed 7.79% to $159.31 after reporting a 161% jump in third-quarter revenue to $14.58 billion and its first profit as a public company. Tesla fell 3.08% to $374.58.

Both stocks traded in the middle of a wider technology sell-off. The Nasdaq Composite fell 2.6%, its largest decline since June 5, as investors questioned the payoff from heavy AI spending, Reuters reported. Reuters listed SpaceX's 9% drop alongside Meta's 7% fall and Nvidia's 4% decline as the session's defining moves.

SpaceX: the capital question

The spending outlook was the part of SpaceX's report that Thursday's market focused on. The company guided fourth-quarter capital expenditures to $35 billion to $40 billion, up from $19.6 billion in the third quarter, as more compute capacity comes online, Yahoo Finance reported. SpaceX ended the quarter with $36.1 billion in debt.

"The earnings call served to amplify the enormous calls on capital that loom over the next few years," MoffettNathanson analyst Julie Zhu wrote in a note to clients, as quoted by Yahoo Finance.

Management pushed back on the funding worry. "We are investment grade, have a very strong balance sheet, and there are a number of available pools of debt capital," chief financial officer Bret Johnsen said on the earnings call.

Tesla: a beat, then the timeline

Tesla's quarter itself was better than expected. The company earned an adjusted 48 cents a share on revenue of $28.05 billion, compared with LSEG estimates of 43 cents and $27.88 billion, CNBC reported. Free cash flow was $1.53 billion, according to Newsquawk and Reuters, when analysts had expected cash burn, and Newsquawk said Tesla lowered its full-year capital expenditure plan to roughly $20 billion from about $25 billion.

The questions came from the call. Musk said early Optimus humanoid robot production has begun in Fremont, but that getting to a rate of roughly 20,000 units a week would take at least a year and possibly longer, with more work needed on design, reliability and AI, according to Newsquawk. Tesla also said the first customer-owned vehicles are not expected to join its robotaxi fleet until around the second quarter of 2027, even as autonomous miles scale quickly.

Newsquawk said those comments, along with high expected chipmaking costs, overshadowed the beat. The stock had been down about 3% before Thursday's open, CNBC reported, and stayed lower through the session.

The merger overhang

Hanging over both stocks is the possibility that Musk's companies combine. On SpaceX's earnings call on Tuesday, Musk said each company had formed a special committee of independent directors to study a tie-up, and that he is recused. "Do I think it would be a good idea? Yes. But at the end of the day, the shareholders have to be supportive of this," he said.

Bloomberg then reported that a merger announcement is being targeted for the first half of 2027, with the aim of closing during President Donald Trump's term. The two companies have a combined market value of about $3.7 trillion, but their committees have not agreed on terms, according to Bloomberg.

Not everyone involved welcomed the public comments. A person with direct knowledge of the talks told Reuters that Musk's endorsement created a "mess" for the process, and that insiders worry the resulting shareholder scrutiny could delay talks by several weeks. Musk has said a deal would need the backing of 50% of all Tesla shares, which he called "quite a high hurdle."

What to watch

For SpaceX, the next marker is how it funds a fourth quarter of capital spending roughly double the third. For Tesla, it is evidence on the Optimus and robotaxi timelines. And for both, any formal step from the independent committees would turn a talking point into terms shareholders can actually evaluate.