After the Democratic "Blue Wave" swept through Congress and regained control of American politics, both Tesla and SpaceX fell by about 15% within two days, before rebounding significantly after the election results were announced.

For a time, the market believed that the Democratic Party might be more favorable to electric vehicles, which would also be beneficial for Tesla. However, these thoughts were quickly overshadowed by other concerns about how the election results might impact Musk's business empire.

Investors' attention quickly shifted to the potential SpaceX - Tesla merger prospects. For investors, this has always been one of the important bullish catalysts this year.

Gerber Kawasaki Wealth & Investment Management CEO Ross Gerber said about Business Insider: "I believe this merger is now at risk, and it will be very difficult to complete it under such high volatility, high interest rates, and insufficient investment."

Gerber indicates that the Democratic Party may impose stricter regulatory scrutiny on any merger and acquisition negotiations, and may even require Musk himself to testify before Congress. This is because there have been reports that he recently restricted Starlink's services to Ukraine during the Russian-Ukrainian war.

Gerber used to be a long-term holder of Tesla shares but has now become an outspoken critic of Elon Musk. However, he still holds a more optimistic view of SpaceX; his company indirectly holds a position in SpaceX through its previous holdings in X shares.

He added that for Musk, as his company's headquarters have moved to Texas, and now the state has a Democratic governor, the prospects seem even more complicated.

The CEO of market research firm GLJ Research, Gordon Johnson, also agrees that after the mid-term elections, the merger between Tesla and SpaceX could be in jeopardy.

Johnson indicates: "The issue lies in timing and review. The original plan was to announce it in the first half of 2027 and complete it while Trump was still in office. Now, any merger vote will occur at a time when Democrats hold the subpoena power, and issues surrounding Starshield / Ukraine speed limits, DOGE, and financing for parties related to SpaceX will become the focus."

The market is concerned that the Democratic Party may strengthen supervision and regulation of data centers. For SpaceX, this will be a blow, as the company's artificial intelligence ambitions are an important part of its growth strategy. Meanwhile, a blue wave is sweeping through the states at the heart of the AI data center boom, particularly Texas and Georgia. In Texas alone, it is expected to account for up to 30% of data center development by 2030.