Tesla-SpaceX Merger ‘Does Make Strategic Sense,’ Analyst Says — But SpaceX Needs Nearly 2x The Growth

• The firm said Tesla could supply batteries and solar products, while Grok and Starlink could support its vehicles and robots.
• Morningstar’s $70 SpaceX fair value estimate implies about 51% downside from current levels.
• Musk supports a merger, but committee talks and shareholder approvals leave a deal uncertain.

Tesla and SpaceX could benefit from combining their energy, artificial intelligence, and robotics businesses, according to a Wall Street analyst who also warned that SpaceX would need to substantially exceed its growth projections to justify its share price.

TSLA stock has gained 14% so far this month, on track for its best month since August, while SPCX has fallen 5%, putting it on course for its worst month since July. 

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How Tesla And SpaceX Could Work Together

Morningstar said a Tesla-SpaceX merger “does make strategic sense,” outlining how Tesla’s energy and robotics businesses could work alongside SpaceX’s AI and satellite services.

On a recent episode of The Morning Filter, a Morningstar analyst said Tesla could become a key battery and solar supplier to SpaceX, while Grok could serve as an interface for Tesla’s autonomous-driving software and humanoid robots. Starlink could connect those products.

“Lastly, Starlink will just be able to connect it all, so that will allow Tesla to monitor the vehicles and the robots and really be able to communicate across its entire product base,” Morningstar said.

The companies already have commercial and financial ties. SpaceX disclosed $151 million in Tesla Megapack purchases during the third quarter (Q3), while Tesla valued its SpaceX investment at $2.865 billion as of Sept.30.

Why Morningstar Still Sees 51% Downside For SPCX

Morningstar raised its SpaceX fair value estimate to $70 from $62 after earnings, citing stronger AI growth and rapid Starlink expansion. Even after the increase, its valuation implies about 51% downside from current levels. 

The firm’s forecasts already assume substantial growth. It projects revenue of $41 billion in 2026, double the previous year, and $228 billion by 2030, about 5.5 times the projected 2026 level. The model also assumes a 65% compound annual growth rate over five years.

Morningstar expects SpaceX to move from a $0.12 per-share loss in 2026 to $2 per-share earnings in 2030, with its operating margin reaching 28%.  Yet even those projections don't support the stock’s price, the firm said.

“If you’re buying the stock here, I think you have to be able to assume that not only are they going to be growing much faster than what we’re currently modeling in, they almost have to double what we’re currently modeling in, and that’s just to get to fair value,” Morningstar said. “That’s not even to think about saying that the stock is cheap here.”

Who Pays For Musk’s Chip Ambitions?

Tesla and SpaceX’s Terafab chip project could cost tens of billions of dollars through early 2028 and more than $100 billion longer term, but the funding split remains unresolved. “We’ve got to figure out what the relative split is between SpaceX and Tesla in terms of who pays for what at Terafab,” Musk said.

The companies are targeting a first test chip around May or June 2027 and volume production around the third quarter of 2028. Tesla is also targeting deliveries outside Optimus around the end of 2027, after beginning early production in Fremont.

Morningstar separately raised Tesla’s fair value estimate by 5%, citing stronger FSD adoption assumptions and slightly lower near-term capital spending.

On the other hand, Musk supports a merger but said his conflicts keep him out of the independent committees’ talks. “It is an odd kabuki dance, where two groups of people are talking, and I cannot be in the conversation,” he said. He also warned against treating a deal as certain. Tesla would need support from holders of 50% of all shares, while SpaceX requires approval from its special committee, board and controlling shareholder.

How Do Retail Traders Feel About TSLA And SPCX?

On Stocktwits, retail sentiment for TSLA and SPCX was ‘bearish’, with message volume at ‘normal’ for TSLA and ‘low’ for SPCX. 

One user said, “$SPCX The merger has to happen in the next two years or it will never happen.”

Another user said, “$SPCX Accumulating under $150 for long term hold. The merger with $TSLA is going to happen. Don’t bet against Musk.”

While TSLA stock has declined 10% year-to-date, SPCX has fallen 11% over the same period. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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