As Tesla Deliveries Rebound, Is It a Better Investment Than SpaceX Stock?

Tesla (NASDAQ: TSLA) stock has had a tough year and a half, but a recent rebound in electric vehicle (EV) deliveries and progress with robotaxis and its Optimus robots have put it in a stronger position. The question is, does this make it a better investment than Elon Musk's other company, Space Exploration Technologies (NASDAQ: SPCX)?

I think it could.

What investors know about Tesla

2025 saw Tesla's overall revenue decline by 3% and its automobile revenue fall by 10%. Meanwhile, its adjusted EPS plunged 28%, as operating expenses rose. This year, sales have started to recover, although it has seen a large drop in its highly profitable regulatory credit revenue due to the U.S. removing CAFE standard penalties and looser restrictions in Europe.

The stock, however, got a lift to start the month after reporting strong Q3 delivery numbers that easily beat estimates. For the quarter, Tesla delivered 486,532 vehicles, well ahead of the consensus for 462,000 deliveries. That was its highest total quarterly deliveries for the year, although a decline from the 497,099 it delivered in Q3 of last year.

Tesla's improving trends have been led by Europe, where drivers have started to once again embrace EVs in the wake of high gas prices stemming from the U.S. conflict with Iran. This could be seen in Tesla registration numbers in September, which were up 128.3% in Portugal, 61.9% in France, 38.4% in Sweden, and 24.8% in Spain.

In addition to recovering EV sales, Tesla also introduced its new Cybercab and Semi Truck recently. While the company trails Alphabet's Waymo in scale at the moment, its Cybercabs cost much less to produce and ultimately could have much better economics in a wide-scale rollout. This is a huge potential market where the surface has barely been scratched. Meanwhile, the electric semi-truck opens up another new market for the company.

Tesla's biggest long-term opportunity, though, may be with its Optimus robot. While there have been some reported snags getting its hands to work, the company has converted an EV facility to manufacture the robots and is hoping to make more than 1,000 a week before year-end, with a longer-term goal of making 20,000 a week. Musk has predicted that Optimus will ultimately become Tesla's largest business at some point.

What investors know about SpaceX

Musk's other business, of course, is SpaceX, which IPO'd earlier this year. Like Tesla, SpaceX has some huge ambitions. While Tesla is looking to shake up the self-driving and robotics industries, SpaceX is looking at far-flung bets on data centers in space, earth-to-earth transport, and asteroid mining.

The company is a leader in the space industry, having developed a reusable rocket. It's now looking to apply that to an even larger rocket, Spaceship, which could help it unlock some of its more aspirational goals. It still faces technical challenges with a larger rocket, but it continues to make solid progress.

In the near- to medium-term, SpaceX's growth is set to be driven by artificial intelligence (AI) infrastructure, AI coding, and its Starlink satellite internet service. Starlink is currently its largest business by both revenue and profitability and is performing well, although the growth of its AI data center business will likely far outpace it in revenue in the coming years. Meanwhile, its acquisition of AI coding company Cursor should add a third powerful leg of growth over the next few years.

Why Tesla stock is the better buy

Ultimately, I think SpaceX will acquire Tesla to help bring both of Musk's companies under one roof. It makes a lot of sense not to have him split his time between the two ventures, and it should come with nice synergies. For example, Tesla's solar systems could be used to eventually power orbital data centers, and its robots could help assemble them in space.

Prediction markets are also betting that a merger will happen soon. Polymarket currently puts the odds at 63% that a merger will occur before the end of next year, and Kalshi recently saw the odds rise to 80%. I'd expect SpaceX to acquire Tesla at a decent premium within the next two years, but even if it doesn't, Tesla still has some strong prospects, and it trades at a much cheaper valuation than SpaceX.

As such, I think it is the better growth stock to buy right now.

Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Tesla. The Motley Fool has a disclosure policy.