Texas goes blue, and Musk's SpaceX-Tesla merger math gets messier

Musk's empire took a hit before the opening bell. SpaceX was indicated at $131.99 in pre-market trading on Nov 4, down 6.60% from its $141.31 close the day before. Tesla sat at $378.38, off 5.05% from a $398.50 close. Fair warning: pre-market prints are thin, and they can flip.

The trigger is Texas going blue. Hinojosa ran on a moratorium on new data centers and an end to their tax breaks — and data centers are exactly where Musk's growth story lives. SpaceX wants to expand its compute buildout to as much as 13 GW next year, up from 1.7 GW today. Texas and Georgia together hold roughly a third of all US AI data-center investment.

Boca Chica is the other sore spot. Hinojosa came out against a possible sale of beachfront state park land to SpaceX, saying flatly that Texas is not for sale. Add in the billions SpaceX pulls from government contracts and Starlink's role in defense, and more oversight looks baked in.

Wall Street isn't writing the obituary yet. Morgan Stanley's Adam Jonas nearly doubled his 2027 estimates, per Investing.com, now calling for $175B in 2027 revenue and $289B in 2028. He also moved free cash flow turning positive up to 2031 from 2035. Musk, for his part, joked that data centers in space are looking appealing.

The SpaceX-Tesla question is still live. Both companies have stood up special committees, and Musk said a combination has a lot of merit while offering no guarantee it happens. Reuters put the potential size at about $3.5T, with talks still in the early innings.

What the election changes is the price of getting there — more time, more litigation, more political friction. It doesn't erase Musk's motive. Tesla's 34% climb since late July already priced in some merger hope, so it has more to give back, while SpaceX carries the heavier exposure to data-center policy and government scrutiny. A deal that closes later is a different bet than one that closes on schedule.