Elon Musk May Merge Tesla with SpaceX Soon
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: Fool
- Merger Potential Discussion: Earlier this year, Musk merged xAI and SpaceX, leading investors to increasingly believe that a merger between Tesla and SpaceX could happen as soon as next year, thereby enhancing both companies' market dominance in their respective fields.
- Resource Sharing Benefits: Tesla and SpaceX already collaborate on various projects, such as the Terafab chip manufacturing initiative, which not only enhances their technological capabilities but also lays the groundwork for a future merger, promoting synergies in technological innovation.
- Capital Acquisition Opportunities: Tesla generated $7 billion in free cash flow over the past 12 months, providing SpaceX with greater capital acquisition opportunities; a merger would help SpaceX scale its operations while attracting more investor interest.
- Market Expectations and Risks: Analyst Dan Ives suggests that a merger could occur by 2027, a timeline that, while aggressive, reflects market expectations that such a merger would create significant growth opportunities, albeit with increased risks and uncertainties that investors need to carefully evaluate.
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Analyst Views on TSLA
Wall Street analysts forecast TSLA stock price to fall
30 Analyst Rating
12 Buy
11 Hold
7 Sell
Hold
Current: 442.100
Low
25.28
Averages
401.93
High
600.00
Current: 442.100
Low
25.28
Averages
401.93
High
600.00
About TSLA
Tesla, Inc. designs, develops, manufactures, sells and leases high-performance fully electric vehicles and energy generation and storage systems, and offers services related to its products. Its segments include automotive, and energy generation and storage. The automotive segment includes the design, development, manufacturing, sales and leasing of high-performance fully electric vehicles, and sales of automotive regulatory credits. It also includes sales of used vehicles, non-warranty maintenance services and collisions, part sales, paid supercharging, insurance services revenue and retail merchandise sales. The energy generation and storage segment include the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives. Its consumer vehicles include the Model 3, Y, S, X and Cybertruck. Its lithium-ion battery energy storage products include Powerwall and Megapack.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Potential Assessment: SpaceX estimates that of its $28.5 trillion total addressable market, only $1.6 trillion pertains to connectivity, while the AI market represents a substantial $26.5 trillion, indicating that the primary growth driver for the company lies in the AI sector.
- Investment Risk Warning: Despite the potential IPO valuation of $1.5 trillion, SpaceX's core business remains focused on internet access, and current losses exceed profits, prompting investors to carefully evaluate the associated risks and returns.
- Strategic Recommendation: Given SpaceX's high valuation and insufficient profitability, it is advisable for investors to adopt a wait-and-see approach post-IPO, seeking a more attractive entry point to mitigate investment risks.
See More
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- Competitor Analysis: Tesla (TSLA) not only lags behind Waymo but also falls short of Nebius (NBIS)-owned Avride's 317 and Nuro's 47 authorized robotaxis, indicating a further compression of its market share.
- Regulatory Environment Changes: With the new law in Texas tightening oversight on commercial self-driving vehicles, Tesla's (TSLA) robotaxi service, available in limited areas of Austin, Dallas, and Houston, faces increased compliance pressures that could impact future expansion plans.
- Operational Timing Differences: Waymo (WAYMO) commenced its robotaxi operations in Texas last March through a partnership with Uber (UBER), while Tesla (TSLA) only began its service in June 2025, creating a timing gap that places it at a disadvantage in market competition.
See More
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- AI Strategic Investment: Meta's substantial investments in AI, including building data centers and developing large language models, have been successfully integrated into its social media and advertising processes, likely improving ad effectiveness and increasing revenue while strengthening market competitiveness.
- New Revenue Streams: Meta has announced the rollout of consumer subscription plans that allow users to access special features, while also testing AI subscription services for businesses, which will provide a robust new revenue stream and cater to diverse user needs for future growth.
- Valuation Attractiveness: With a price-to-earnings ratio of 19, Meta is currently the cheapest among the Magnificent Seven, reflecting market caution regarding the monetization of its AI investments; however, as AI products are gradually launched, this could represent a key turning point for the stock.
See More
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- AI Investment Returns: Meta Platforms has heavily invested in AI over the past few years, and while it hasn't yet monetized these investments, the gradual application of AI tools in social media and advertising is expected to drive advertising revenue growth, thereby enhancing overall profitability.
- Large User Base: With over 3.5 billion daily users across Facebook, Instagram, and WhatsApp, Meta's advertising revenue growth is closely tied to user engagement, providing a stable income source and long-term growth potential for the company.
- New Revenue Streams: Meta has announced the rollout of consumer subscription plans that allow users to access special features while testing AI subscription plans for businesses, which will open new revenue channels and further strengthen its market competitiveness.
- Attractive Valuation: Trading at a price-to-earnings ratio of 19, Meta is the cheapest among the Magnificent Seven tech stocks, and despite the challenges of a longer return cycle on AI investments, its potential for growth makes it a focal point for investors.
See More
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- Trillionaire Odds Surge: Traders are now estimating over a 90% chance that Musk will become the world's first trillionaire before 2027, reflecting his significant net worth increases to over $500 billion in October and $700 billion in December, indicating strong market confidence in his wealth trajectory.
- Bright SpaceX IPO Outlook: Musk denied reports of a lowered SpaceX valuation, reaffirming that the upcoming IPO is set to be a historic success, expected to outperform other IPO deals and further solidify its leadership in the aerospace sector.
- Tesla-SpaceX Merger Anticipation: Analysts predict a potential merger between Tesla and SpaceX by next year, a strategic move that could enable Musk to better control the AI ecosystem and enhance synergies between the two companies in the tech space.
- Market Confidence Boost: With SpaceX having confidentially filed with the SEC in April and planning to debut on Nasdaq next month, market sentiment towards Musk's future developments is optimistic, reinforcing the belief that he will become the world's first trillionaire.
See More
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- Regulatory Approval: Estonia's transport authority announced on Friday that it has cleared Tesla's FSD driver-assistance system for use on its roads, marking a significant step in the system's rollout across European markets.
- Type Approval Recognition: This approval is based on a type approval initially granted in the Netherlands, demonstrating Tesla's compliance and adaptability across various European nations, thereby enhancing its market position in the autonomous driving sector.
- Market Impact: With the approval of the FSD system, Tesla is poised to expand its market share in Estonia and surrounding regions, further promoting the adoption of electric vehicles and the application of smart driving technologies.
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See More
