Tesla, Inc. (TSLA) shares rose 0.1% overnight late Tuesday after JPMorgan said a potential Tesla-SpaceX merger looks 'strategically coherent on paper,' while RBC Capital raised its price target to $500 citing robotaxi opportunity. The commentary revived merger speculation between the two Elon Musk-led companies. TSLA stock had slid 4% during Tuesday's session, closing at $402.90. JPMorgan maintained a Neutral rating and flagged multi-jurisdictional regulatory approval risks, particularly in China where Tesla has major manufacturing and sales exposure.
JPMorgan Maintains Neutral Rating on Tesla-SpaceX Merger Feasibility
JPMorgan said a possible merger between Tesla and SpaceX looks 'strategically coherent on paper,' pointing to potential vertical integration across 'AI, robotics, energy, transportation, & space.' The brokerage said that SpaceX's record IPO could give it 'high-value acquisition currency,' making a deal more plausible from a market-value standpoint. JPMorgan maintained a Neutral rating on Tesla.
Elon Musk is the largest shareholder of both companies, and Tesla already owns about 19 million SpaceX shares. The companies also work together across AI tools, chip development and computing infrastructure.
RBC Capital Raises Tesla Price Target to $500 on Robotaxi Opportunity
RBC Capital raised its Tesla price target to $500 from $475, implying a 24% upside from current levels, while keeping an Outperform rating. The firm said it updated its model to include a 25%-30% premium over current trading levels to reflect a potential SpaceX acquisition scenario. RBC also said robotaxi remains Tesla's strongest opportunity, citing a $4.2 trillion total addressable market. The firm said Tesla could create substantial value even with a minority share of that market.
JPMorgan Flags China Regulatory Approval Risk for Potential Merger
JPMorgan flagged the 'practical bottleneck of securing multi-jurisdictional regulatory approvals,' especially in markets such as China, where Tesla has major manufacturing and sales exposure.
The concern also echoes a risk highlighted by Morningstar last month: SpaceX is a major U.S. government and military contractor, while Tesla has significant auto and battery operations in China, a combination that could draw U.S. regulatory scrutiny tied to national security and supply-chain concerns.
Tesla Launches Robotaxis in Miami Over the Weekend
Tesla's robotaxi rollout gained investor attention after launching robotaxis in Miami over the weekend, including unsupervised vehicles. Morgan Stanley said it expects Tesla to launch in Phoenix, Orlando, Tampa and Las Vegas by year-end, with the supervised and unsupervised fleet reaching 1,500 vehicles by the end of this year and 30,000 by 2030.
'While the absolute number of robotaxis is likely immaterial to earnings this year, the rate of change in the rollout provides more clarity for investors who may be skeptical about Tesla's autonomous technology at scale,' Morgan Stanley said.
Tesla Reports Second-Quarter Results July 22
Tesla is set to report full second-quarter results on July 22, with investors looking for commentary on margins, robotaxi expansion, Full Self-Driving (FSD), Cybercab, Semi production and the company's AI plans.
Retail Sentiment on Stocktwits Remains Bullish
On Stocktwits, retail sentiment for TSLA was 'bullish' amid 'high' message volume. One user said, 'They are now starting to promote the merger of Tesla and SpaceX as the next big thing with this stock... because that is the only real catalyst left in either of these POS's.' Another user said, 'I still see strong upside in this week. Today wasn't the move I was looking for, but my outlook hasn't changed. As long as key levels hold, I'm still watching for a breakout tomorrow. We'll see if the buyers step back in.'
So far this year, Tesla's stock has lagged its 'Magnificent Seven' peers, making it the group's second-worst performer, down about 10%.
FAQ
What did JPMorgan say about a Tesla-SpaceX merger?
JPMorgan said a possible merger between Tesla and SpaceX looks 'strategically coherent on paper,' citing potential vertical integration across AI, robotics, energy, transportation and space. The brokerage maintained a Neutral rating on Tesla and flagged multi-jurisdictional regulatory approval risks, especially in China.
What is RBC Capital's new price target for Tesla stocks?
RBC Capital raised its Tesla price target to $500 from $475, implying a 24% upside from current levels, while keeping an Outperform rating. The firm updated its model to include a 25%-30% premium to reflect a potential SpaceX acquisition scenario and cited a $4.2 trillion total addressable market for robotaxi.
When does Tesla report second-quarter earnings?
Tesla is set to report full second-quarter results on July 22, with investors looking for commentary on margins, robotaxi expansion, Full Self-Driving (FSD), Cybercab, Semi production and the company's AI plans.
