What Happens to Stock Prices if Tesla and SpaceX Merge? The Birth of One of the World's Largest AI and Space Companies and Future Stock Price Forecasts
October 16, 2026 | Investment Analysis of US Stocks, AI, and the Space Industry
Speculation regarding a merger between Tesla and SpaceX, both led by Elon Musk, is finally becoming a reality.
Analysts at major British financial firm Barclays, including Dan Levy, have pointed out the possibility that a merger could be announced by early December 2026. The scenario being considered is a major restructuring in which SpaceX acquires Tesla through a stock swap.
However, as of October 16, 2026, neither company has officially announced a merger agreement. This remains strictly at the stage of financial institution forecasting. The point to focus on with this news is that it is not simply a story about an automaker and a rocket company joining forces.
By integrating Tesla’s autonomous driving, humanoid robot, and battery technologies with SpaceX’s satellite communications, space transport, AI development, and semiconductor initiatives, a massive vertically integrated AI company could be born.
Current Stock Prices and Corporate Scale
Tesla (TSLA)
$362.44
October 15 closing price -1.29%
Market capitalization approx. $1.43 trillion
SpaceX (SPCX)
$148.62
October 15 closing price approx. -2.3%
Market capitalization approx. $2.02 trillion
Source: MarketWatch, TradingView, etc. Based on US market closing prices on October 15, 2026. SpaceX listed on NASDAQ in June 2026 with the ticker symbol SPCX. Therefore, there is now an actual market stock price for SpaceX as well as Tesla. The simple combined market capitalization of both companies is approximately $3.45 trillion. If they merge, one of the largest mega-corporations in the global stock market will be born.
However, there is an important issue here that investors must not overlook.
An increase in corporate scale and an increase in the value of shares held by existing shareholders are not necessarily the same thing. 1. If they merge, what will happen to Tesla stock and SpaceX stock?
First, let’s consider the case where SpaceX absorbs Tesla through a stock swap.
In this case, there is a possibility that existing Tesla shareholders would receive SpaceX shares in exchange for the Tesla shares they hold.
For example, based on current stock prices,
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Tesla: $362.44
-
SpaceX: $148.62
One share of Tesla stock is equivalent to approximately 2.44 shares of SpaceX stock.
Furthermore, if a 20% acquisition premium is added, the acquisition valuation would be approximately $434.93 per Tesla share, making an exchange for approximately 2.93 shares of SpaceX stock the theoretical benchmark.
Of course, the actual exchange ratio will be determined by negotiations on the merger terms.
What to note here is that even if SpaceX’s stock price rises after the merger, if there is significant dilution due to share issuance, the benefits for existing SpaceX shareholders could be small.
Conversely, if Tesla shareholders can merge at a favorable exchange ratio, they can benefit from the acquisition premium.
In other words, with this merger speculation, the interests of Tesla shareholders and SpaceX shareholders do not necessarily align.
2. Stock price forecast in the event of a merger [One year later, October 2027]
From here, I would like to try forecasting specific stock prices.
The calculation uses the closing prices on October 15, 2026, and the publicly announced number of outstanding shares.
Since there are differences in SpaceX’s market capitalization depending on the aggregation site, this calculation, which specifies the number of shares, adopts approximately $1.96 trillion. The combined market capitalization of both companies would be approximately $3.39 trillion.
Furthermore, we assume the following conditions.
-
Stock swap where SpaceX becomes the surviving company
-
Tesla’s acquisition premium is 20%
-
Approximately 2.93 shares of SpaceX delivered per 1 share of Tesla
-
No additional large-scale capital increases or stock splits will be conducted
This does not mean that a merger has been decided, but is an assumption for comparing investment value.
October 2027 after the merger is completed – Independent scenario
Scenario
SpaceX stock price
Converted value of one old Tesla share
Bearish
$110
Approx. $321
Neutral
$151
Approx. $442
Bullish
$185
Approx. $541
Very Bullish
$206
Approx. $603
Estimates compared to the closing price on October 15, 2026. The post-merger Tesla converted value is SpaceX stock price × assumed exchange ratio of 2.9264. These are not official stock price targets for either company.
Stock price scenario one year after the merger is completed
SpaceX stock price in USD. The value of old Tesla shares is converted at approximately 2.93 times.
The neutral scenario is a case where the market valuation of the corporate group formed by the merger expands by approximately 10% from the simple sum before the merger.
In the bullish scenario, an expansion of approximately 35% is assumed, and in the very bullish scenario, approximately 50%.
Looking at it this way, while Tesla shareholders can expect profits from the premium, for SpaceX shareholders, how much corporate value can actually be newly created by the merger is more important than the merger itself.
Note that if the merger is completed and Tesla stock ceases to exist, the Tesla column in the table above represents the valuation of the new company’s shares corresponding to one share of the old Tesla stock, rather than the stock price traded as TSLA.
3. What will the stock price be in 3 years? [October 2029 Forecast]
The effects of the merger may appear more in the medium term of about three years than in the short term.
This is because in-house production of AI semiconductors, commercial expansion of robotaxis, mass production of Optimus, and expansion of Starlink’s communication services require significant capital investment and time.
The following table is my own forecast for October 2029, assuming the merger is completed and the aforementioned exchange ratio is maintained.
Scenario
SpaceX Stock Price
Conversion Value of 1 Old Tesla Share
Bearish
$100
Approx. $293
Neutral
$220
Approx. $644
Bullish
$320
Approx. $936
The neutral scenario of $220 corresponds to a case where the post-merger market capitalization reaches approximately $5.44 trillion. This is an increase of about 60% from the current combined total of both companies.
In the bullish scenario of $320, the market capitalization would be approximately $7.92 trillion. This forecast is based on the premise that extremely high growth expectations will be realized and involves considerable uncertainty.
4. Why might a merger increase corporate value?
I am particularly focusing on the following three business areas.
First is the in-house production of AI semiconductors.
Terafab, which both companies are advancing, is a massive semiconductor manufacturing project planned in Texas. The initial plan alone indicates an investment scale of $55 billion, and it could potentially exceed $100 billion in the future. If they can mass-produce proprietary semiconductors, they may be able to reduce the computational costs of AI development. However, mass-producing cutting-edge semiconductors is extremely difficult, and technical success is not guaranteed.
Second is the integration of physical AI and generative AI.
Tesla possesses AI technology that operates in the real world, such as Robotaxi and Optimus, while SpaceX is developing generative AI and AI infrastructure through its subsidiary, xAI.
If the two integrate, they could unify everything from AI model development to the actual operation of robots.
This could lead to differentiation from other AI companies.
Third is recurring revenue from Starlink.
SpaceX’s number of Starlink subscription lines reached 12 million as of the end of June 2026, doubling from 6 million in the same period the previous year. However, the average monthly revenue per subscription line has fallen from $85 to $66. If they can achieve both an expansion in the number of subscribers and profitability, their value will increase not only as a space industry player but also as a telecommunications infrastructure company.
5. The possibility that a merger could conversely lead to a stock price decline
On the other hand, very high growth expectations are already priced into both companies.
In the second quarter of 2026, revenue was approximately $28.2 billion for Tesla and approximately $7.8 billion for SpaceX. Although SpaceX achieved a 92% year-on-year increase in revenue, it recorded a net loss of approximately $541 million. If you simply multiply the combined quarterly revenue of both companies by four, it comes to an annualized figure of approximately $144.2 billion.
Against this, the combined market capitalization of both companies is approximately $3.39 trillion. The simply calculated Price-to-Sales Ratio (PSR) reaches approximately 23.5 times.
In other words, if they do not continue to grow in a way that meets investors’ high expectations even after the merger, there is a possibility that the stock price will undergo a significant correction.
Risks that deserve particular attention include massive investments in semiconductor factories, deteriorating profitability of generative AI, delays in robot mass production, stock dilution due to the merger, and conflicts of interest among shareholders.
For example, in the previous assumption of a 20% acquisition premium, if the post-merger corporate value does not increase from the simple sum, the theoretical price of SpaceX stock would fall to approximately $137.
This is a typical example where, even if a merger appears successful, a burden is placed on the existing shareholders of the acquiring company.
6. What if they do not merge and only expand joint ventures?
A case where they do not fully merge but proceed with the joint development of semiconductor factories and AI technology is also conceivable.
In this case, since the stocks of both companies would continue to be traded separately, both Tesla stock and SpaceX stock could be evaluated at their respective prices.
My unique scenario for October 2027 is as follows.
Scenario
Tesla (TSLA)
SpaceX (SPCX)
Bearish
$260
$95
Neutral
$400
$165
Bullish
$520
$230
Assumptions based on current stock prices, room for business growth, investment burdens, and valuations. This is not market consensus.
The advantage of not merging lies in the ability to deepen technical cooperation between the two companies while avoiding the risk of dilution through stock swaps.
On the other hand, adjustments between the two companies regarding capital allocation and terms for the use of intellectual property will be necessary, which could potentially lead to slower decision-making compared to a full integration.
7. Points for investors to watch in the future
First, in the near term, Tesla’s third-quarter earnings report scheduled for October 21, 2026, is important. I want to pay attention to whether specific information regarding the funding burden for Robotaxi, Optimus, and Terafab will be released.
Next, the presence or absence of a merger announcement by the end of the year, the stock swap ratio if announced, the review by independent directors, and the conditions for shareholder approval will become important.
In the long term, it will be necessary to confirm actual sales of robots and AI models, Starlink’s operating profit, semiconductor manufacturing yields, and free cash flow after capital expenditures.
8. Conclusion: Which stock’s upside potential am I focusing on?
Regarding this merger speculation, I believe that in the short term, expectations for an acquisition premium are likely to emerge for Tesla stock.
However, this is limited to cases where favorable exchange terms are actually presented.
On the other hand, SpaceX possesses multiple growth areas in addition to its Starlink communications business, including space transportation, AI infrastructure, and generative AI.
If these succeed in terms of profitability as well, there is a possibility of achieving significant corporate value appreciation over a three- to five-year time horizon.
Even so, the current stock price already reflects very high expectations. It is entirely possible that even for an excellent company, if the purchase price is too high, investment returns will not grow.
My basic view is that while a merger could potentially increase the business value of both companies, whether it becomes a favorable merger for shareholders depends on the exchange ratio and the post-merger earning power.
Will the massive AI, robotics, space, and semiconductor company envisioned by Elon Musk be born? And will that vision translate into actual profits?
I will continue to closely monitor future developments.
*The stock price forecasts in this article are based on a proprietary scenario analysis using the closing price on October 15, 2026, and do not guarantee future stock prices. Merger speculation is also not an official decision. Please make investment decisions at your own risk.
Long-term stock price forecast and realization probability after the Tesla-SpaceX merger [October 2029, 3 years later]
Based on information as of October 16, 2026, we have set the following forecast probabilities for three years after the merger, should it be realized.
Scenario
SpaceX stock price
Converted value of one share of former Tesla stock
Forecast probability
Bearish
$100
$293
35%
Neutral
$220
$644
45%
Bullish
$320
$936
20%
Total
100%
Forecast probability for each scenario
Bearish 35%
Neutral 45%
Bullish 20%
These probabilities are not calculated from statistical backtesting, but are my subjective estimates considering the companies’ growth potential and investment risks.
Why these probabilities?
Bearish 35%: I am cautious about the massive investment in AI semiconductors, delays in robot mass production, and valuation adjustments across the entire AI market. The combined market capitalization of both companies currently reaches approximately $3.5 trillion, leaving room for a correction due to over-expectation. Neutral 45%: This is the case where Starlink’s revenue expansion, progress in the robotaxi business, and growth in the AI business are realized in stages. I judge this scenario to be the most likely at present.
Bullish 20%: This is the case where mass production of Optimus, in-house production of AI semiconductors, and increased profitability of Starlink progress faster than expected. However, since a stock price of $320 corresponds to a post-merger market capitalization of approximately $8 trillion, achieving this requires very significant revenue growth.
Expected stock price based on probability-weighted average
Calculating from the three representative stock prices,
[ 100times0.35+220times0.45+320times0.20 =boxed{$198} ]
October 2029 – Probability-weighted average
$198
+33.2% compared to the current SpaceX stock price of $148.62
Converted value of one share of former Tesla stock
Approximately $579
Calculated using the assumed exchange ratio of 2.9264 shares
However, this is a simple calculation using representative prices for each scenario. These figures do not guarantee actual expected returns.
Furthermore, these probabilities assume that the merger will be completed and the assumed exchange ratio will be maintained. The probability of the merger itself taking place is not included. The merger has not yet been officially decided and faces challenges such as shareholder approval.
In conclusion, while we focus on a 45% neutral outlook for three years from now, it is appropriate to also account for a reasonably high 35% downside risk.