Tesla shares fall 5% as tech, chip selloff and SpaceX IPO loom

Tesla shares dropped about 5% on Tuesday, erasing gains from Monday as weakness in technology and semiconductor stocks weighed on markets and investors showed caution ahead of the expected SpaceX IPO.

U.S. equities declined broadly. The S&P 500 fell 1.3%, the Nasdaq Composite slid 2.1% and the Dow Jones Industrial Average lost 279 points, or 0.6%. The iShares Semiconductor ETF fell roughly 5%, reversing most of a 6% rebound from the prior session after the ETF plunged about 10% last Friday, its worst single-day decline in six years.

Individual chipmakers moved sharply. Micron Technology fell more than 6% after a 10% rally on Monday. Broadcom declined nearly 5% amid continued reassessment of semiconductor valuations following recent volatile trading tied to artificial intelligence-related demand.

Investor attention toward the anticipated SpaceX IPO also affected sentiment. Tesla and SpaceX are separate companies but remain associated with Elon Musk, and some investors appeared to be re-evaluating exposure to Tesla as capital and focus shifted toward the upcoming SpaceX listing.

Wolfe Research maintained a Peerperform rating on Tesla and adjusted its forecasts. The firm raised its 2026 earnings-per-share estimate to $1.89 from $1.62, still slightly below a $1.93 consensus. Wolfe lowered its 2027 EPS forecast to $2.04 from $2.17, citing expectations for higher depreciation, amortization and operating expenses; that estimate remains below a $2.46 consensus for 2027. Wolfe also raised its 2026 vehicle delivery forecast by about 15,000 units to 1.69 million, implying roughly 3% year-over-year growth.

The research firm highlighted expansion in Tesla’s software business. Full Self-Driving subscriptions increased 16% quarter over quarter and 51% year over year in the first quarter, and Wolfe projects about 1.7 million FSD subscriptions by 2026, roughly 50% year-over-year growth on that projection.

Regulatory developments in Europe provided a separate development for Tesla’s autonomous-driving effort. Denmark’s Road Traffic Authority, Færdselsstyrelsen, granted provisional approval for Tesla’s Full Self-Driving (Supervised) driver-assistance system, allowing an over-the-air rollout to eligible customers beginning June 10. Regulators noted the system is classified as Level 2, requires drivers to remain attentive and be prepared to take control, and the authorization is subject to conditions and continued oversight.

The stock decline on Tuesday occurred alongside these corporate forecasts and the Danish approval, with investors focused on short-term sector volatility in technology and semiconductors and on the upcoming SpaceX public offering.