Analysts also flagged risks, including shareholder opposition and regulatory scrutiny from Tesla's China exposure.
- Wolfe Research said the merger thesis has "moved into the mainstream," driven by Musk's voting control, AI synergies and access to a larger capital base.
- Morningstar sees Tesla as the potential winner in any deal, estimating a 66%-34% split between Tesla and SpaceX.
- Morningstar said Tesla and SpaceX are becoming intertwined through AI, chips and infrastructure projects.
Shares of Tesla, Inc. (TSLA) hit a one-month low on Tuesday as investors fretted over mounting speculation about a SpaceX merger ahead of Friday's blockbuster IPO. But one research firm sees Tesla holders as the potential winners, estimating that they could walk away with up to 66% of a combined entity.
TSLA stock fell 3% on Tuesday to close the session at $396.68 and dropped another 0.2% in extended trading.
SpaceX IPO Fuels TSLA Merger Speculation
The merger thesis is gaining momentum as Elon Musk prepares to take SpaceX public in what could be the largest IPO in Wall Street history. The rocket, satellite and AI company is seeking to raise $75 billion at a $1.8 trillion valuation, with investor demand reportedly surpassing $250 billion and running nearly four times the shares available. Tesla, notably, is mentioned 87 times in SpaceX's latest S-1 filing.
Musk is the largest shareholder of both companies, fueling speculation that his automotive, AI and space ventures could eventually merge. Tesla owns about 19 million SpaceX shares, while the companies already collaborate on AI tools, chip development, and computing infrastructure. Kalshi traders currently predict a 50% chance of a Tesla-SpaceX merger before May 2027, while Polymarket places the odds at 43% before the end of 2026.
Wolfe Research said that the potential for an eventual SpaceX-Tesla merger has "increasingly moved into the mainstream," with some investors now making it their primary reason for owning Tesla stock, Investing noted.
Why Analysts Think TSLA-SpaceX Deal Makes Sense
Wolfe said that the merger thesis rests on three pillars: Musk's growing voting control, the potential to create an AI powerhouse combining Tesla's real-world data with SpaceX's computing infrastructure, and access to a larger capital base.
Morningstar sees a similar logic, saying that Tesla and SpaceX are becoming increasingly intertwined through AI initiatives, chip development and supply-chain ties. SpaceX has bought over $500 million worth of Tesla Megapacks and $130 million worth of Cybertrucks. Morningstar said that Tesla's robotaxi platform could eventually leverage Grok and Starlink, adding that the "most important additional reason" for a merger is Musk's desire to bring his businesses under "one conglomerate," enabling talent, tech and resources to move more freely across companies.
Morningstar Sees TSLA As The Merger Winner
While SpaceX is expected to debut at a valuation above Tesla's $1.5 trillion, Morningstar believes Tesla shareholders may have more leverage than investors assume. The firm said that Tesla investors may be reluctant to accept a deal that values Tesla below SpaceX, especially given SpaceX's soaring valuation and negative free cash flow.
"Ultimately, we think Tesla shareholders may agree to a deal that gives Tesla at least 50% of the combined company, but they may want even more control," Morningstar said. The research firm estimated a "66%-34% Tesla/SpaceX equity ratio" based on its fair-value assumptions. Morningstar also said it "wouldn't be surprised to see a deal occur within a year of the SpaceX IPO."
The Risks In A TSLA-SpaceX Merger
Despite the growing enthusiasm, both firms see major obstacles. Wolfe said that a merger would likely require a substantial premium, could face opposition from existing SpaceX shareholders, and may attract regulatory scrutiny due to Tesla's extensive operations in China. Wolfe ultimately believes a deal remains "unlikely until mid-2027 (at the earliest)."
Morningstar also raised similar concerns, noting that SpaceX is a major U.S. government and military contractor, while Tesla maintains significant manufacturing and battery operations in China. The firm also warned that Tesla shareholders may be wary of future dilution, while new SpaceX investors may resist merger terms implying a discount to the IPO valuation.
How Do Retail Traders Feel About TSLA And SpaceX?
On Stocktwits, retail sentiment on Tesla was 'bearish' amid 'normal' message volume, while SpaceX sentiment was 'extremely bullish' with 'extremely high' message volume.
So far this year, TSLA stock has lagged its “Magnificent Seven” peers, making it the group’s second-worst performer, down 12%.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
