Wall Street eyes merger upside as SpaceX's AI-fueled growth stuns
TSLA•SpaceX posted third-quarter profit above estimates as revenue more than doubled on AI-driven growth, and Elon Musk called a potential merger with Tesla “a good idea.” Shares rose 9.2% and about 2%, respectively, in premarket trading.
1. Results and merger idea
SpaceX posted third-quarter profit that beat estimates as revenue more than doubled on strong AI-driven growth. CEO Elon Musk backed a potential merger with Tesla, calling it “a good idea”; SpaceX shares rose 9.2% and Tesla shares about 2% in premarket trading.
2. Analysts weigh deal
J.P. Morgan said a likely structure would be a SpaceX-led all-stock deal with a typical 30%-35% premium to Tesla's current valuation, creating a merger of equals and helping Musk retain majority voting control. RBC cited valuation and governance hurdles but saw potential benefits in AI, computing and semiconductor development. Morningstar said a combination could simplify shared initiatives and that the probability of a deal could rise over time, particularly if SpaceX maintains its premium valuation. Bernstein pointed to management's expectation of at least a $100 billion annualized revenue run rate by year-end and $500 billion to $1 trillion in recurring revenue by the end of 2027.
