Tesla Raises 2026 Capex to $25B; Shares Fall on SpaceX Talk

Tesla raised its 2026 capital-expenditure target to $25 billion from $20 billion after its earnings call on Wednesday, and the stock fell about 3% as traders processed the update and renewed speculation about a possible tie with SpaceX.

The higher capex prompted questions about near-term cash flow. Some analysts warned aggressive spending could push the company into negative free cash flow later this year. Jeffries cautioned the plan could create temporary loss centers, a view reinforced by comments on the earnings call. The shares have risen nearly 60% over the past 12 months even as the auto business showed signs of weakness.

Attention on Wall Street shifted to SpaceX. The private rocket company is expected to pursue an initial public offering later this year at a valuation some investors have estimated near $2 trillion. Several firms said a SpaceX listing and any potential combination with Tesla are shaping investor expectations alongside traditional financial measures. Baird noted Elon Musk is managing many Tesla projects while advancing a SpaceX IPO and said Tesla shares may be linked to SpaceX headlines. Roth added the IPO could drive market discussion, including questions such as whether SpaceX could buy CyberTrucks. Jeffries observed that standard valuation tools have limited use for a company driven heavily by narrative and sentiment.

On the call, Elon Musk told investors SpaceX will handle the initial phase of a scaled-up buildout for Terafab, Tesla’s semiconductor fabrication effort. He said any deal would require approval from both boards and a conflict-resolution process. Musk added, “It’s going to have a lot of, unfortunately, a lot of complexity because we’ve got to make sure Tesla shareholders are served and SpaceX shareholders are served, and strike the right balance there.” Baird interpreted those remarks as consistent with a long-term aim to consolidate Musk’s businesses.

Analysts offered mixed views on Tesla’s operations. Melius pointed to improving take rates for Full Self-Driving and low cancellation levels. Stifel described the energy storage business as weak: Tesla reported energy-segment revenue of $2.41 billion, below Stifel’s $3.28 billion forecast, down 37.2% from the fourth quarter of 2025 and down 11.8% from a year earlier. Tesla deployed 8.8 gigawatt-hours of storage in the first quarter, a 38% sequential decline. Chief Financial Officer Vaibhav Taneja expects 2026 deployments to exceed 2025 levels.

Market conditions helped limit a steeper sell-off. Investors reacted to signs of easing geopolitical risk after an extension of a ceasefire in Iran. Oil prices were restrained by reserve releases, spare producer capacity and weaker demand. Broader corporate earnings also provided some support: nearly 80% of S&P 500 companies that reported beat estimates, and technology-driven trades, including AI exposure, regained momentum.

Analysts noted the near-term focus will be on execution of the larger spending plan, the pace of cash generation and how headlines around a SpaceX IPO or any corporate combinations influence investor behavior.