It Took Tesla 10 Years to Perform Its First Stock Split. Here's Why a SpaceX Stock Split Could Come Much Sooner.

Space Exploration Technologies (NASDAQ: SPCX) and Tesla (NASDAQ: TSLA) are often compared because Elon Musk is the founder, CEO, and largest individual shareholder of both companies. And now that SpaceX is public, some investors are trying to decide which stock is the better buy. They may also be wondering whether one hypothetical that has been getting widely discussed -- a SpaceX-Tesla merger -- makes sense.

Considering that in the short time that is has been public, SpaceX briefly soared as high as 50% above the $150 per share price at which it opened its first day of trading, some investors may even be wondering whether a SpaceX stock split is in the cards for the relatively near future or if it is more likely to wait a decade to conduct its first split like Tesla did. Here's what could lead to a SpaceX stock split, and if the growth stock is a buy now.

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A primer on stock splits

Stock splits do nothing to directly increase the value of a business. They simply divide the ownership pie into more parts. A split makes it easier for small retail investors to buy full shares of a company, although many brokers and employee stock plans offer fractional shares. Stock splits also make options contracts more accessible, since those are sold in 100-share increments.

That said, there can be a psychological effect. Seeing a stock go from $20 to $21 a share can feel underwhelming compared with a jump from $2,000 to $2,100 per share, even though both are 5% gains. What's more, a stock split is generally viewed as a tangible vote of confidence from management: Such events generally happen only after the share price has risen significantly, and they indicate that company leadership expects those gains to continue.

But research by The Motley Fool shows that the results for stocks in the periods after they split are mixed, so it's better to pick stocks to buy based on fundamentals instead of looking for splits.

The makings of a SpaceX stock split

Tesla went public in June 2010 at a non-split-adjusted price of $17 per share.In August 2020, Tesla announced its first-ever stock split -- a 5-for-1 stock split, to be exact, that gave four additional shares for each then-held share. It conducted a 3-for-1 split in 2022. That means Tesla's split-adjusted IPO price is just $1.13 per share -- a mind-blowing 33,503% gain for investors who bought at the IPO price and held.

At the time of its first split, Tesla was approaching $2,500 per share, and it was under $900 at the time of its second. But Tesla was a small-cap company at the time of its IPO, whereas SpaceX was the biggest IPO in history and is currently one of seven companies with market caps over $2 trillion.

What's more, SpaceX's IPO price was $135 per share.

In sum, it took Tesla a decade to engage in a stock split after it had gone from a small-cap to a large-cap company. SpaceX might only have to go up a few times over before considering a stock split.

It's worth noting that there's no standard price level for stock splits, but the vast majority of S&P 500 companies trade at under $1,000 per share. However, splits at lower share prices aren't unheard of. Apple was around $500 a share when it engaged in a 4-for-1 stock split in 2020. CrowdStrike is performing a 4-for-1 stock split on July 2, and it closed on June 26 at $701.09 per share.

SpaceX was trading at $153.23 per share at the time of this writing; if it increases in value by at least fourfold (which would put its market cap just over $10 trillion), I would not be surprised if it considers a stock split.

On a percentage basis, that would be a far smaller increase than Tesla had before its first split, but it certainly would be an unprecedented amount of market cap creation.

SpaceX needs its biggest bet to pay off

SpaceX's potential road to $10 trillion will depend heavily on how successful it is at building and launching millions of AI data center satellites into orbit. The plan is to launch the first test satellites as early as 2027. From there, Elon Musk wants to increase the computing power of SpaceX's AI satellite constellation by an order of magnitude per year, which is 10 times -- meaning going from 1 gigawatt (GW) in 2027 to 10 GW in 2028, to 100 GW in 2029, to 1,000 GW (1 terawatt) by the end of 2030 -- assuming that the Terafab plant SpaceX is constructing in partnership with Tesla and Intel can produce the chips that its plan requires in sufficient quantity.

There are plenty of obstacles standing in SpaceX's way. For starters, these satellites will be much larger, both in mass and surface area, than Starlink's broadband and mobile satellites, so they will be much heavier and cost more to launch. What's more, placing them in the sun-synchronous orbit Musk has proposed would cause light pollution and create all kinds of headaches for astronomers. SpaceX is building a massive factory in Texas called Gigasat to make these satellites, which could encounter production challenges. Those are only some of a long list of technical and logistical hurdles that will need to be cleared.

And finally, if those issues are overcome, SpaceX will need to prove there is a customer base willing to pay top dollar for this orbital computing capacity to justify the costs. Or, put another way, SpaceX will need to demonstrate that there are measurable cost savings to be had from using orbital data centers rather than Earth-based data centers. If they pan out, those benefits would most likely be related to the fact that they will be powered by solar energy and use large radiator panels to expel the heat the servers generate as infrared radiation, rather than relying on water-based heat sinks or liquid cooling systems.

If SpaceX somehow pulls all of this off, it will become the most important AI infrastructure company in the world and help address one of the biggest challenges in AI -- the energy bottleneck. It could provide the jumping-off point -- and more importantly, the cash flow -- for SpaceX to pursue other endeavors in space technology and interplanetary travel.

Under that outcome, with the combined value of SpaceX-owned xAI and X (formerly Twitter), SpaceX would absolutely deserve a market cap north of $10 trillion, be the world's most valuable company, and could reach the point where its stock price warranted a split. If it launches 1 million AI computing satellites in less than five years, it could engage in a stock split a lot sooner in its publicly traded life than Tesla did.

However, SpaceX reported a net loss in 2025, and there's no telling what challenges could throw a wrench in its ambitious plans. Investors may be better off taking a wait-and-see approach to SpaceX, monitoring its progress toward its goals rather than buying the stock based solely on the company's vision.

Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, CrowdStrike, and Tesla. The Motley Fool has a disclosure policy.