SpaceX's IPO Is Pulling Money Out of Tesla — How Bad Is the Pressure?

Tesla (TSLA) is navigating a subtle shift in investor attention as SpaceX moves toward its public debut. SpaceX priced at roughly $1.77 trillion — topping Tesla's ~$1.6 trillion market cap — and analysts have noted signs of capital flowing out of TSLA and into the IPO allocation, adding short-term pressure on Tesla's stock^[GuruFocus].

How the SpaceX IPO Is Affecting Tesla

The core concern is zero-sum capital allocation. Analysts estimate that roughly $5B–$10B has rotated out of Tesla into SpaceX IPO subscriptions — and that outflow is seen as one driver of Tesla's recent weakness^[Fortune].

Both companies sit under the Musk umbrella, and their retail investor bases overlap considerably. When SpaceX emerged as a highly coveted new allocation, some money that had been parked in Tesla moved over. The SpaceX IPO was reportedly heavily oversubscribed, with around 30% of public shares reserved for individual investors — a higher retail allocation than typical.

Tesla's Recent Price Action

TSLA has seen elevated volatility. The stock has recently traded near $380, below the 2026 intraday highs it posted above $400^{[Vantage Markets]}.

On a day-by-day basis: Tesla rallied nearly 5% on June 8 to close at $408.95; separately, the stock had also dropped 6.6% following a strong U.S. jobs report, which reinforced higher-for-longer rate fears and triggered a broad tech selloff^[GuruFocus]. These moves occurred on different trading days and reflect the two-way volatility TSLA has experienced around the SpaceX listing.

JPMorgan's Upgrade

One notable development amid the cross-currents: on June 5, JPMorgan upgraded Tesla from underweight to neutral and raised its price target from $145 to $475 — a roughly 227% increase^[Quartz].

Analyst Rajat Gupta argued Tesla is "at the frontier of physical AI," with a distinctive edge in deep vertical integration across hardware and software and an unusually fast development cadence. The bank projects EPS growing from roughly $1.95 in 2026 to $7.50 by 2030, with Robotaxi, Optimus, and FSD licensing together accounting for roughly half of the projected upside^[GuruFocus].

Worth noting: this is a pivot from years of bearishness at JPMorgan — but the call lands at neutral, not buy. The bank flagged real risks: Tesla is pushing into categories with no proven large-scale commercial track record. Regulatory clearance for unsupervised Robotaxi operations, safety validation at scale, and the maturation of underlying technology are all prerequisites for those long-range numbers to materialize.

Bulls and Bears Are Still Far Apart

The picture that emerges is a stock caught between competing narratives: near-term capital headwinds from the SpaceX IPO rotation, and longer-term institutional optimism around Tesla's AI and robotics ambitions. Bulls and bears are essentially looking at the same company through different lenses — short-term liquidity flows versus a multi-year growth story.

Key things to watch going forward: how Tesla's order flow evolves after SpaceX begins trading, the regulatory and commercial trajectory of Robotaxi and FSD, and how macro rate expectations continue to reprice high-multiple tech. Together, those variables will determine whether the current pressure is a temporary distraction or the start of a more sustained reset.

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