SpaceX stock surge strengthens case for possible Tesla deal

SpaceX’s sharp rise after its Nasdaq debut has made a theoretical acquisition of Tesla easier to finance with stock, according to Fortune. The issue matters because both companies sit at the center of Elon Musk’s business empire, and Tesla’s valuation depends heavily on future products that are not yet commercial.

Speculation increased after SpaceX president and chief operating officer Gwynne Shotwell discussed the idea in a June 12 CNBC interview with Morgan Brennan. Fortune reported that Shotwell did not rule out SpaceX buying Tesla and said the companies were pursuing a future convergence that could make Musk’s life easier.

Fortune’s analysis centers on the changing math of an all-stock transaction. Before SpaceX began trading, Fortune said the company’s $135-a-share offer price implied a valuation of about $1.75 trillion. With Tesla valued around $1.5 trillion, SpaceX would have had to hand Tesla investors a far larger share of the combined company.

By the close on June 18, SpaceX shares had risen 37% to $185, lifting its valuation to $2.44 trillion, Fortune reported. At that price, Fortune calculated that a Tesla purchase would require issuing stock equal to about 38% of the combined equity, down from about 46% under the earlier valuation.

Tesla’s valuation remains the pressure point

Fortune said Tesla’s recent profits have fallen well below prior years. The company earned $3.4 billion in GAAP net income over the past four quarters, down from $15 billion in 2023 and $7.0 billion in 2024, according to Fortune.

Despite that decline, Fortune reported that Tesla’s market value remains near $1.5 trillion. The publication attributed much of that valuation to investor expectations around robots and self-driving vehicles, products it said are not yet being sold and have faced delayed timelines.

Several market watchers already expected a deal before SpaceX’s share rise, according to Fortune. Wedbush analyst Dan Ives put the odds of a SpaceX-Tesla merger at 80%, while longtime Tesla investor Ross Gerber argued that Musk’s prior move to fold xAI into SpaceX pointed toward a larger AI-focused holding company structure. Fortune also cited Kalshi, where traders had priced the chance of a deal by May of next year at 52%; the figure later rose to 54%.

Shared projects could support a deal argument

Fortune reported that SpaceX’s S-1 filing described multiple areas where the companies already work together. Those include digital workflow projects and joint ownership of the Terafab facility, which is intended to produce one terawatt a year of compute hardware.

Tesla also owns roughly $4 billion in SpaceX stock through its former stake in xAI, which SpaceX acquired in February, according to Fortune. Fortune said Musk’s argument that the companies share an artificial intelligence strategy could help him justify combining them.

The risks would be significant for SpaceX shareholders, Fortune argued. If both companies’ market values held steady through a merger, the combined business would be worth about $4 trillion, placing it behind Nvidia, Alphabet and Apple among U.S. companies, but ahead of Amazon and Microsoft.

Fortune said the combined company would still be unprofitable on a net basis because SpaceX’s losses over the past four quarters would more than offset Tesla’s earnings. It also noted that SpaceX holders would move from owning the whole company to owning less than two-thirds, while taking on Tesla’s electric-vehicle business and its bets on robotaxis, robots and batteries.

This story draws on original reporting from Fortune.