Key Points
SpaceX stock lost 12.5% of its market cap after the election.
It's regaining some losses today, but SpaceX stock remains below its IPO price.
There's more risk to owning SpaceX now, but failure is not guaranteed.
Shares of Space Exploration Technologies (NASDAQ:SPCX) shed 12.5% of their market capitalization in the two days following the 2026 Midterm Elections, as investors worried over the implications a Democrat-controlled Senate and House of Representatives might have for companies controlled by Elon Musk.
On Friday, things got a little better for SpaceX stock. While still underwater relative to its $135 IPO price, SpaceX stock is making back some of its losses today and is up 6.2% to $131.15 at 9:55 a.m. ET.
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Bad news for Elon Musk?
This isn't to say the coast is totally clear for SpaceX. Three days after the election, Democrats dominate the U.S. Senate with 54 seats, plus two independents who caucus with the Democrats -- for a 56-44 majority. In the House, Democrats will enter 2027 with a minimum of 253 seats -- another clear majority over Republicans who cannot possibly hold more than 182.
So what does this mean for Musk & Co.?
Musk made a bold bet on artificial intelligence when he IPO'd SpaceX in June, downplaying his company's space and connectivity divisions in favor of an AI, now "SI" (for Super Intelligence) division targeting a $26.5 trillion total addressable market. That market may be at risk if the new Congress decides to tighten AI regulation and limit data center construction. (A raft of new Democratic governors also hostile to data centers may be an even bigger threat.)
Not all the news is bad
Other threats loom as well: A more left-leaning Congress could curb spending on military satellites, on NASA missions to the moon and Mars, and other projects near and dear to SpaceX. Or... they might not.
Objectively speaking, both parties in Congress should favor a strong national defense, an ambitious space program -- and yes, even advanced (but safe and environmentally responsible) artificial intelligence capabilities.
While there's risk Congress could go the other way, I wouldn't dump SpaceX merely out of fear that the worst might happen.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Space Exploration Technologies. The Motley Fool has a disclosure policy.