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SpaceX Earnings Reignite Tesla-SpaceX Merger Buzz as Tesla Q3 Nears
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Key Takeaways
Musk sees merit in a Tesla-SpaceX merger, with both boards forming committees to explore a potential deal.
SpaceX's revenues surged 161% to $14.58B in Q3, while net income reached $4.4B on strong AI demand.
Tesla faces a challenging Q3 report amid weaker y/y deliveries and an expected operating income decline.
Elon Musk has long hinted that Tesla (TSLA - Free Report) and SpaceX (SPCX - Free Report) could merge. At yesterday’s SpaceX earnings call, he went further, saying a combination has “a lot of merit.” Nothing has been agreed on, but the timing matters. SpaceX just posted a strong quarter, and Tesla reports tonight after the closing bell.
The boards of both companies have formed special committees to discuss a tie-up. Musk is CEO of both, so he says that he is a ‘conflicted party.’ Any proposal has to come from the committees and then go to a shareholder vote. His case rests on shared work in AI software, chip design, robotics, satellite connectivity and the Terafab chip project. Tesla and SpaceX are currently worth roughly $3.5 trillion combined, and a deal would be the biggest merger ever.
The merger talk follows a quarter that put SpaceX in a position of strength.
SpaceX’s Blockbuster Earnings
SpaceX’s revenues skyrocketed 161% year over year to $14.58 billion in the third quarter of 2026. Net income was $4.4 billion against a loss of $1.1 billion a year earlier. It marked the first quarterly profit of the company since going public. Both earnings and revenues surpassed the Zacks Consensus Estimate.
Space Exploration Technologies Corp. Price, Consensus and EPS Surprise
Its “Super Intelligence” unit grew a whopping 830% to $7.56 billion, driven largely by developers paying to use its data-center capacity. It is an early sign that the company’s big bet on AI infrastructure can earn money. The bet is still expensive, though. Capital spending nearly tripled to $19.6 billion in the quarter.
SpaceX’s results lifted its shares 8% in after-hours trading, but Tesla heads into its release with subdued expectations. Tesla surpassed earnings estimates twice in the trailing four quarters for as many misses.
Our proprietary model indicates that a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) — to increase the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Our proven model does not predict an earnings beat for TSLA this time around, as the stock has an Earnings ESP of -7.19% and a Zacks Rank #4 at present.
Tesla delivered 486,532 vehicles (comprising 478,237 units of Model 3/Y and 8,295 Other models) in the third quarter of 2026, up 1.3% sequentially. However, the deliveries missed our model estimate of 494,446 units and fell 2.1% on a year-over-year basis. We also expect Tesla’s total operating income to decline more than 68% due to higher cost of revenues, R&D and SG&A expenses. Spending on AI, Cybercab, Optimus and Tesla Semi is likely to have impacted operating results and pressured free cash flow.
Investors will look for updates on FSD, robotaxis and Optimus. The merger question is likely to come up on Tesla’s earnings call as well.
Where the Two Companies Overlap
Tesla and SpaceX already work together. A merger would formalize a partnership that is well underway in AI software, chip design, robotics and connectivity.
Terafab is the most concrete example. The chip-manufacturing venture is run by the two companies, and Musk said on the call that it should deliver a first test chip around May or June next year. Volume production is targeted for the third quarter of 2028.
Terafab is aimed at producing advanced AI chips that Tesla needs for Optimus and its broader AI ambitions. For Tesla, securing enough computing capacity is important as it expands beyond electric vehicles into autonomous driving, robotics and AI. A closer relationship with SpaceX could give Tesla access to capital, engineering talent and infrastructure that would otherwise take years to build independently.
The overlap runs through daily operations too. SpaceX shows up as a paying Tesla customer, sourcing energy storage hardware and even buying Cybertrucks for its own use. Meanwhile, Tesla is pulling SpaceX and xAI technology back into its vehicles. Grok is being built into Tesla cars and reportedly powers parts of Optimus's digital brain. Starlink connectivity is going into the Cybercab, with plans to roll it out fleet-wide, as robotaxis need reliable connectivity to truly go autonomous everywhere.
Last Word
Beyond sharing a founder, Tesla and SpaceX are being built on the same foundation: AI models, custom chips and a shared hunger for computing power. Musk also has a record of pulling his companies together, from Tesla’s purchase of SolarCity in 2016 to xAI’s takeover of X and, this February, SpaceX’s acquisition of xAI. SpaceX’s strong quarter has given that pattern fresh momentum, and Tesla’s results tonight are likely to add more fuel to the discussion.
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Image: Bigstock
SpaceX Earnings Reignite Tesla-SpaceX Merger Buzz as Tesla Q3 Nears
Key Takeaways
Elon Musk has long hinted that Tesla (TSLA - Free Report) and SpaceX (SPCX - Free Report) could merge. At yesterday’s SpaceX earnings call, he went further, saying a combination has “a lot of merit.” Nothing has been agreed on, but the timing matters. SpaceX just posted a strong quarter, and Tesla reports tonight after the closing bell.
The boards of both companies have formed special committees to discuss a tie-up. Musk is CEO of both, so he says that he is a ‘conflicted party.’ Any proposal has to come from the committees and then go to a shareholder vote. His case rests on shared work in AI software, chip design, robotics, satellite connectivity and the Terafab chip project. Tesla and SpaceX are currently worth roughly $3.5 trillion combined, and a deal would be the biggest merger ever.
The merger talk follows a quarter that put SpaceX in a position of strength.
SpaceX’s Blockbuster Earnings
SpaceX’s revenues skyrocketed 161% year over year to $14.58 billion in the third quarter of 2026. Net income was $4.4 billion against a loss of $1.1 billion a year earlier. It marked the first quarterly profit of the company since going public. Both earnings and revenues surpassed the Zacks Consensus Estimate.
Space Exploration Technologies Corp. Price, Consensus and EPS Surprise
Space Exploration Technologies Corp. price-consensus-eps-surprise-chart | Space Exploration Technologies Corp. Quote
Its “Super Intelligence” unit grew a whopping 830% to $7.56 billion, driven largely by developers paying to use its data-center capacity. It is an early sign that the company’s big bet on AI infrastructure can earn money. The bet is still expensive, though. Capital spending nearly tripled to $19.6 billion in the quarter.
SPCX stock currently carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tesla Faces a Tough Test
SpaceX’s results lifted its shares 8% in after-hours trading, but Tesla heads into its release with subdued expectations. Tesla surpassed earnings estimates twice in the trailing four quarters for as many misses.
Tesla, Inc. Price, Consensus and EPS Surprise
Tesla, Inc. price-consensus-eps-surprise-chart | Tesla, Inc. Quote
Our proprietary model indicates that a company needs to have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) — to increase the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Our proven model does not predict an earnings beat for TSLA this time around, as the stock has an Earnings ESP of -7.19% and a Zacks Rank #4 at present.
Tesla delivered 486,532 vehicles (comprising 478,237 units of Model 3/Y and 8,295 Other models) in the third quarter of 2026, up 1.3% sequentially. However, the deliveries missed our model estimate of 494,446 units and fell 2.1% on a year-over-year basis. We also expect Tesla’s total operating income to decline more than 68% due to higher cost of revenues, R&D and SG&A expenses. Spending on AI, Cybercab, Optimus and Tesla Semi is likely to have impacted operating results and pressured free cash flow.
Investors will look for updates on FSD, robotaxis and Optimus. The merger question is likely to come up on Tesla’s earnings call as well.
Where the Two Companies Overlap
Tesla and SpaceX already work together. A merger would formalize a partnership that is well underway in AI software, chip design, robotics and connectivity.
Terafab is the most concrete example. The chip-manufacturing venture is run by the two companies, and Musk said on the call that it should deliver a first test chip around May or June next year. Volume production is targeted for the third quarter of 2028.
Terafab is aimed at producing advanced AI chips that Tesla needs for Optimus and its broader AI ambitions. For Tesla, securing enough computing capacity is important as it expands beyond electric vehicles into autonomous driving, robotics and AI. A closer relationship with SpaceX could give Tesla access to capital, engineering talent and infrastructure that would otherwise take years to build independently.
The overlap runs through daily operations too. SpaceX shows up as a paying Tesla customer, sourcing energy storage hardware and even buying Cybertrucks for its own use. Meanwhile, Tesla is pulling SpaceX and xAI technology back into its vehicles. Grok is being built into Tesla cars and reportedly powers parts of Optimus's digital brain. Starlink connectivity is going into the Cybercab, with plans to roll it out fleet-wide, as robotaxis need reliable connectivity to truly go autonomous everywhere.
Last Word
Beyond sharing a founder, Tesla and SpaceX are being built on the same foundation: AI models, custom chips and a shared hunger for computing power. Musk also has a record of pulling his companies together, from Tesla’s purchase of SolarCity in 2016 to xAI’s takeover of X and, this February, SpaceX’s acquisition of xAI. SpaceX’s strong quarter has given that pattern fresh momentum, and Tesla’s results tonight are likely to add more fuel to the discussion.