RBC Capital Markets raised its price target on Tesla to $500 on Tuesday, flagging the possibility of a SpaceX acquisition alongside its continued optimism around the company’s autonomy business.
Tesla‘s stock performance has been volatile throughout the first six months of the year, declining sharply from its all-time high of $498.83 on December 22, 2025, to a 2026 low of $337.24 in early April.
Over the past three months, the stock has gradually recovered on autonomy-related progress and sales growth across the globe.
RBC’s new price target implies 19.1% upside from Monday’s closing price of $419.77 and a $25 increase from the previous objective.
The firm maintained an Outperform rating on the stock.
As of press time, Tesla shares were trading nearly 3% lower at around $408, amid a general market sell-off.
SpaceX Merge
In a new research note published on Tuesday — and obtained by PriceTarget — analyst Tom Narayan said the updated target incorporates “a 25-30% premium to current trading levels, (and a 15% premium to the stock’s intrinsic value).”
According to the analyst, the value is owed “to a potential SpaceX acquisition scenario based on unconfirmed media reports.”
The most likely deal structure would involve an all-stock transaction, with SpaceX acquiring Tesla at a 20% to 30% premium, Narayan wrote.
He cited “operational collaboration — proprietary chip manufacturing, Megapacks for data center energy needs, and collaborative AI training and fleet management services” as the strategic rationale behind the premium.
The analyst also flagged a governance consideration, noting that existing Tesla shareholders would likely demand a premium because Musk “would control 50%+ of a combined entity, well above the ~20% stake he currently holds in Tesla.”
Speculation around a potential combination has intensified in recent months.
Wedbush analyst Dan Ives has been talking about the odds of a Tesla-SpaceX merger at over 80%, reiterating on Monday that there’s a chance it happens within the next year.
SpaceX listed on the Nasdaq in June, following its acquisition and merger with xAI, Musk’s artificial intelligence venture.
The two companies, along with xAI, also announced Terafab — a joint chip manufacturing facility originally projected at $25 billion — in March.
Narayan’s Coverage History
The price target hike reverses a string of reductions by Narayan earlier this year.
In mid-April, RBC lowered its Tesla target to $480 from $500 as part of a broader cut that also trimmed estimates on Ford and Lucid ahead of first-quarter earnings.
Days later, Narayan cut the target again to $475, reflecting $5 billion in higher capital expenditure and modest adjustments to his humanoid robotics valuation.
The $500 figure now matches the level Narayan held in early 2026 before those reductions, though it arrives with a fundamentally different supporting thesis.
Robotaxi Expansion
RBC’s framework applies 1x sales to Tesla‘s core automotive segment, 15x EBITDA to Megapacks, and 10x revenue across autonomy segments covering Full Self-Driving, robotaxi operations, and robotics.
Narayan has consistently highlighted Tesla‘s robotaxi business as a key valuation driver, and has previously noted that FSD subscriptions grew 51% year over year.
The note arrives just days after the company launched its ride-hailing service in Miami— extending operations to a third state and opening the first of five cities whose rollout had slipped past the company’s own first-half deadline.
The geofenced zone spans across western Miami-Dade, covering West Miami, Doral, and Coral Gables.
Miami joins Austin, Dallas, Houston, and the San Francisco Bay Area as active markets.
Phoenix, Orlando, Tampa, and Las Vegas remain on the company’s target list for 2026, though none has opened to the public.
Q2 Delivery Beat
Last week, Tesla reported second quarter deliveries that beat Wall Street consensus and marked the company’s best second quarter on record.
The company delivered 480,126 vehicles globally in the second quarter, a 25% year-over-year increase that reversed two consecutive quarters of missed estimates.
Production reached 451,758 vehicles during the quarter.
Tesla is scheduled to report second-quarter financial results after the market close on July 22.
RBC projects revenue rebounding to $111 billion in 2026, up from an estimated $93.5 billion in 2025, with adjusted earnings per share rising from $1.99 to $2.99.
