Tesla shares were rising about 6% on Monday morning after Barclays upgraded the stock, arguing that a widely expected combination with SpaceX should come at a premium for Tesla shareholders and that the carmaker’s core business and robotaxi program are turning a corner.
The shares traded at $394.64 at press time, up $22.42, or 6.02% while SpaceX shares were up about 1.5% at $149.70.
The move capped a run of news since Friday, including record Cybercab activity at the Formula 1 race in Austin, a much larger driverless Robotaxi zone in Houston announced on Monday, a production record at Giga Berlin, a tenth EU approval for Full Self-Driving (Supervised) and a new FSD rental channel on Turo.
Barclays analyst Dan Levy upgraded Tesla to ‘Overweight’ from ‘Equal Weight’ and raised his price target to $450 from $370, according to the note archived by Price Target, EV‘s sister publication that archives Wall Street research word for word.
“The recent dialogue around Tesla has skewed heavily to a potential combination with SPCX, a point firmly acknowledged by CEO Elon Musk on last week’s SPCX and TSLA earnings calls,” Levy wrote.
“With a combination heavily expected, and with expectation for some premium to TSLA stock, we believe this should drive upside for the stock,” he said.
He argued the case did not rest on a deal alone. The auto business is on track to grow this year after two years of declines, Levy wrote, with FSD-driven demand and rising exports from Giga Shanghai supporting further gains in 2027.
He also pointed to Tesla’s energy storage business, which the company said is nearly sold out for 2027 because of demand from data centers. Levy said that could support shipment growth of more than 50%.
“In recent weeks we’ve seen a sharp inflection in Robotaxi miles driven, boosting hope that TSLA can compete more directly with Waymo in autonomous ridehailing,” he wrote.
The upgrade ends a run of ‘Equal Weight’ calls. Levy had held a $360 target from January to June before raising it to $370 in July, according to Price Target.
Barclays has reached 81% of its 27 price targets that are at least a year old within 12 months, ranking 16th of 28 firms tracked by Price Target. On Tesla, four of its six such targets were reached.
Bernstein analyst Douglas Harned, who covers SpaceX, raised his SpaceX target to $268 from $248 on Monday. “Elon talked of a possible Tesla merger and SpaceX is reportedly discussing a telco tower deal,” Harned wrote. “We make no assumptions on either here.”
Cantor Fitzgerald analyst Andres Sheppard separately reiterated an ‘Overweight’ rating and $485 target on Monday, pointing to a “material” free-cash-flow beat in the third quarter and Tesla’s cut to its 2026 capital spending target to $20 billion from $25 billion.
The SpaceX question
The merger talk has dominated trading in both stocks since their earnings last week.
Both companies’ boards have formed special committees of independent directors to explore deepening the relationship, which could include a business combination, according to their quarterly filings. The filings say there is no assurance any deal will happen.
“Do I think it would be a good idea? Yes,” Musk said on SpaceX’s earnings call on October 20, according to Yahoo Finance. He added that “because I’m a conflicted party, I can’t actually be in the discussions of the special committees,” and that a merger should not be assumed to be a certainty.
On Tesla’s call a day later, Musk said he had “said everything that should be said” on a potential merger the day before. Head of Investor Relations Travis Axelrod said the company would not take questions on it.
SpaceX bought $480 million of Tesla’s Megapack batteries in the first nine months of the year, and Tesla invested about $2 billion in SpaceX stock in March, a stake worth $2.9 billion at the end of September, according to the filings.
They also plan to build Terafab, a semiconductor plant in Texas, together. Musk said on Tesla’s call it would cost “tens of billions” through early 2028 and “probably be north of $100 billion long term,” and that the two companies still had to work out “who pays for what.”
Dan Ives of Yorkville Ives, who has a $500 target on Tesla, put the odds of a merger at 90% in an interview with CNBC on October 22. “That price point has to be between $500 and $550,” he said, referring to Tesla shares in a deal. His latest SpaceX note on Price Target, from October 20, kept an ‘Outperform’ rating and $225 targetwithout addressing a merger.
Tesla shares had recovered most of their after-hours losses the day after the results, as analysts said the stock was trading more on a possible SpaceX merger than on quarterly numbers.
Cybercabs flood Austin
Tesla put its driverless Cybercabs out in force around the Formula 1 United States Grand Prix at the Circuit of the Americas over the weekend. Sawyer Merritt, a Tesla shareholder, said on X that more than 50 Cybercabs were dropping off passengers at the race by midday on Sunday.
“Robotaxis as far as the eye can see!” wrote Ashok Elluswamy, Tesla’s Vice President of AI Software, on X on Sunday, sharing a photo of a line of Cybercabs and Model Ys near the circuit.
Cybercab Spotter, which compiles crowd-sourced sightings, logged a record 1,250 Cybercab sightings in Austin on Saturday, with 93% showing nobody in the driver’s seat. Robotaxi Radar, which charts the same data, said the previous high was 1,072 on October 16.
Tesla has not disclosed how many rides it gave to the race.
Houston liftoff
On Monday, Tesla sharply enlarged its driverless Robotaxi service area in Houston. “Houston, we have liftoff,” its Robotaxi account wrote on X. “Bigger service area now live.”
The new zone keeps the original patch in northwest Houston around Jersey Village and stretches southeast through central Houston and downtown toward Bellaire, according to the map Tesla posted. Tesla did not give its size. The previous zone covered about 25 square miles.
The map’s outline resembles a starship. Musk quote-posted it on X minutes later, joking, “I swear it’s just a coincidence.”
Public rides in Houston use Model Ys without anyone in the front seats, while public Cybercab rides remain limited to Austin. Tesla launched driverless rides in Houston and Dallas in April.
A federal proposal published on Monday would also ease one hurdle for the Cybercab. NHTSA proposed exempting vehicles without manual driving controls from the requirement for a turn signal that cancels when the steering wheel turns, a rule the agency has questioned in its review of how Tesla certified the robotaxi.
FSD keeps spreading
Tesla said on Monday that Latvia had approved FSD (Supervised), the tenth EU country to recognize the Dutch regulator’s approval. “Rollout begins soon,” Tesla’s European account wrote on X.
Car-sharing marketplace Turo also said it would let US travelers book FSD-enabled Teslas from Wednesday, verifying each car’s FSD status through an integration with Tesla. Eligible hosts get a free one-month FSD trial.
Tesla said in its third-quarter results that more than 75% of new North American deliveries included FSD, and that active subscriptions reached 1.74 million.
Berlin record, Cybertruck exit
Tesla’s factory near Berlin built 7,000 Model Ys in a single week, a record for the plant, Tesla’s manufacturing account said on X on Friday. The plant runs “24/5,” Plant Manager André Thierig said, about 500 cars a week short of its 7,500 target.
Tesla is also scrapping the Cybertruck for Australia and New Zealand. “After careful consideration, plans to produce Cybertruck for Australia and New Zealand have been discontinued,” it told reservation holders in an email shared on X by Tesla shareholder Sawyer Merritt.
The new Roadster went on public display for the first time at the Petersen Automotive Museum in Los Angeles on Saturday, nine days after its unveiling in Texas. The base version has no thrusters and is “not to be messaged as having butterfly doors.”
The 18 analysts who set a Tesla target in the past three months range from $24.86 to $500, with a median of $446, according to Price Target.
Even after Monday’s gain, the stock remains about 21% below its 52-week high of $498.83.
