Tesla could be the next asset folded into Elon Musk’s expanding conglomerate, the company’s most bullish Wall Street analyst said Tuesday, after the billionaire confirmed the merger of SpaceX and xAI.
Wedbush’s analyst Dan Ives wrote in a new X post that “there is a growing chance that Tesla will eventually be merged in some form into SpaceX/xAI over time.”
“The view is this growing AI ecosystem will focus on Space and Earth together…..and Musk will look to combine forces,” Ives added.
Reuters and Bloomberg reports mentioned the advanced stages of the merger late last week, citing regulatory documents.
Despite Musk apparently hinting at a confirmation, the merger was only established on Monday, with SpaceX acquiring the AI-focused startup in a deal valued at $1.25 trillion.
Upon disclosing its fourth quarter financial results last week, Tesla revealed that it had invested “approximately $2 billion” in xAI.
Previous Reports
Bloomberg reported last Thursday that, based on people familiar with the matter and two legal entities registered in Nevada last month, Tesla would merge with SpaceX.
The documents contained “merger sub” in its name and SpaceX CFO Bret Johnsen as an executive.
A Reuters report published hours earlier said the merger would be between xAI and SpaceX, information that Musk appeared to confirm in an X reply.
Tesla shares initially jumped 4% in early trading but reversed course to close the session down 3.5%.
Stock Performance
The stock has lost 15% of its value between December 22 — when it hit a new all-time high of $489.83 — and February 2.
Despite that, Wedbush analyst Dan Ives has been reiterating its $600 price target and Outperform rating on the stock.
Based on Monday’s closing price, the price target implies a 42.4% upside potential on the share value.
As of press time, the stock is trading slightly lower at $418.
Ives wrote in a recent research note that Wedbush estimates that the “AI and autonomous opportunity is worth at least $1 trillion alone for Tesla.”
Additionally, the analyst said “Tesla will own ~70% of the global autonomous market over the next decade as no other company in the world can match the scale and scope of Tesla coupled with its broadening AI footprint.”
SpaceX IPO
Last week, the Financial Times reported that SpaceX, the most-valuable privately held company in the world, was planning to go public this year, with an IPO above $1 trillion.
For comparison, the Wall Street Journal valued xAI at $230 billion last November, while Tesla, trading at the New York Stock Exchange, has a market cap of nearly $1.6 trillion.
Earlier this month, Musk was a guest on the Moonshots podcast, hosted by Peter Diamandis and Dave Blundin, where he talked about Tesla‘s mission of building “a world of amazing abundance.”
Musk agreed when one of the hosts suggested that while Tesla and SpaceX were initially “completely separate,” they now “actually interact because AI ties everything together.”
