TSLA Stock Down, SPCX Stock Up Premarket As Merger Buzz Grows — Analyst Raises Deal Odds To 90%

• Munster raised the odds of a Tesla-SpaceX merger to 90%, up from 80% before the Q2 earnings call.
• Musk said Starlink is being integrated into Cybercab and could expand to other Tesla vehicles.
• Musk also said Grok already powers Tesla vehicles, while Terafab will help manufacture enough AI chips to scale Optimus production.

Shares of Tesla, Inc. (TSLA) slid 5% premarket on Thursday, while SpaceX (SPCX) shares rose over 1% as merger speculation intensified, with Deepwater Asset Management Managing Partner Gene Munster raising the odds of the two Elon Musk-led companies combining within the next few years to 90%.

While TSLA stock is on track for its worst monthly performance since February, SPCX is headed for its third consecutive weekly loss. 

Tesla-SpaceX Merger Odds Rise To 90% 

Munster said on X that Tesla’s willingness to entertain a merger question during its second-quarter (Q2) earnings call was notable, particularly because Musk continued discussing the companies’ overlap after handing the question to legal counsel. Musk said that Tesla and SpaceX already collaborate across several areas and acknowledged that there is “more and more overlap,” especially around Terafab.

“Obviously, we can’t talk about combining companies and that kind of thing on an earnings call. It’s got to be done with the appropriate process,” Musk said. Tesla General Counsel Brandon Ehrhart added that the companies have “numerous beneficial transactions” and recently expanded their relationship through a deal covering projects such as Terafab and Digital Optimus.

Munster said he had entered the call assigning an 80% probability to a merger over the next few years. After hearing Musk elaborate on the operational benefits, he raised the estimate to 90%. The analyst highlighted Starlink’s role in maintaining Robotaxi connectivity as an example of the companies’ growing interdependence. Musk said Starlink could prevent autonomous vehicles from entering “Bermuda Triangles” of poor cellular coverage, while Grok, Digital Optimus and Terafab represent additional areas of collaboration.

Tesla Taps Starlink For Autonomous Fleets

Musk said Starlink is being integrated into Cybercab and could eventually be added to other Tesla vehicles in markets where the satellite service operates. Reliable connectivity will be essential for autonomous fleets, he said, since cellular service can be unreliable even in major technology hubs. Starlink could also support entertainment and productivity during autonomous rides, including high-bandwidth streaming and video calls at a lower data cost than traditional cellular networks.

The partnership extends beyond connectivity. Musk said Grok is already available in Tesla vehicles and helps direct Digital Optimus, while Terafab will be critical to producing enough AI chips to support large-scale Optimus manufacturing.

TSLA Trades Below Key Moving Averages 

Tesla reported Q2 adjusted earnings of $0.33 per share, missing the $0.54 consensus estimate, while revenue of $28.24 billion topped expectations of $26.36 billion. Record second-quarter deliveries supported the revenue beat, but lower average selling prices, declining regulatory-credit revenue and higher operating expenses pressured profitability. 

On the other hand, bearish bets have increased alongside the stock’s decline, according to S3 Partners. Tesla short interest has climbed from 60 million shares in March to nearly 80 million shares, an increase of about 33%, while the S3 Short Interest Ratio has risen to 1.75 days to cover, its highest level since 2021. The stock is also trading below its 50-day moving average of $409 and 200-day moving average of $417, with both levels acting as overhead resistance. Tesla failed to hold a breakout above $430, its relative strength index (RSI) has weakened to 39 and the moving average convergence divergence (MACD) remains in a bearish crossover.

How Do Retail Traders Feel About TSLA And SPCX?

On Stocktwits, retail sentiment was 'bullish' for TSLA and 'bearish' for SPCX, with both tickers drawing 'high' message volume. 

One user said, “$TSLA shareholders will be very disappointed when $SPCX merges with Tesla. I believe this will happen especially if Tesla goes sub 200 a share... Bad deal for long time bagholders.”

Another user said, “$TSLA My thoughts on Elon’s goal: Sink the market cap of Tesla and allow $SPCX to buy it cheap. It’ll probably work, too.”

So far this year, Tesla's stock has lagged its "Magnificent Seven" peers, making it the group's second-worst performer, down about 17%. Even so, Tesla continues to command a premium valuation, trading at a forward price-to-earnings ratio of roughly 165x, by far the highest multiple among the Magnificent Seven stocks. 

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