Musk’s Companies in Late 2026: Sky-High Valuations, Thin Margins

Elon Musk’s business empire looks very different than it did a year ago. His rocket company absorbed his AI startup, went public in the largest IPO ever, and now rivals Tesla as his most valuable holding. But the scorecard is mixed: soaring valuations sit alongside thin margins and heavy losses.

Tesla: Steady Cars, Squeezed Profits

Tesla delivered 486,532 vehicles in the third quarter, comfortably beating the roughly 462,000 analysts expected. It was the second straight quarter of beating estimates, and a slight improvement on the 480,126 delivered in the second quarter. Still, deliveries were about 2% below the record 497,099 Tesla set a year earlier, and the Model 3 and Model Y still account for nearly all of its sales. Energy storage deployments of 13.7 GWh also fell short of forecasts.

The bigger worry is profitability. Tesla’s operating margin shrank to 1.4% in the second quarter, and free cash flow turned negative as the company poured money into robotaxis, the Optimus humanoid robot and self-driving software. It now expects to spend more than $25 billion on capital projects this year. The robotaxi service has expanded to seven US metro areas and Cybercab production has begun, but Musk has said robotaxi revenue won’t become meaningful until 2027. Investors have noticed: as of late summer, the stock was down roughly 19 to 23% for the year. Full third-quarter results arrive October 21.

SpaceX: The New Crown Jewel

In February, SpaceX acquired xAI in an all-stock deal that valued the combined company at $1.25 trillion, bringing the Grok chatbot and the X social network under the SpaceX roof. In June it listed on Nasdaq at $135 a share, the biggest IPO in history, giving it a market value of about $1.77 trillion.

The ride since has been bumpy. Shares peaked at $225.64 on June 16, then slid to around $110 by early August as investors weighed heavy AI spending and a wave of insider shares becoming eligible for sale. SpaceX lost $4.9 billion in 2025 and $4.28 billion in the first quarter of 2026 alone, with Starlink’s profits effectively subsidizing xAI. Yet the stock has bounced back hard: it closed September at $150.86 and climbed nearly 18% in the first week of October, approaching $180. Starlink, with roughly 10,500 active satellites, remains the engine that makes the whole thing work.

xAI and Grok

Inside SpaceX, xAI keeps shipping. Grok 4.5 launched in July, followed by Grok 4.6 in August. Grok remains a challenger rather than a leader in the chatbot race, and the AI unit burns cash. Still, it gives SpaceX a story about space-based AI computing that investors are clearly willing to pay for.

Neuralink

Neuralink is far smaller and still private. Its last major raise was $650 million in 2025 at a valuation of about $9 billion, and it holds FDA breakthrough designations for its speech and vision devices. Since its first human implant in 2024, it has moved into multiple clinical trials. That is real progress, but it is still a long way from a commercial business.

The Bottom Line

Musk’s companies are priced as if the future has already arrived, while the present looks more modest. Tesla’s car business is stable but no longer growing, and its profits are being plowed into unproven bets. SpaceX is the standout, with a dominant launch and satellite business, but it is carrying expensive AI ambitions on its back. Whether these valuations hold up depends on robotaxis, humanoid robots and orbital AI that, for now, are still mostly promises.