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Zacks Investment Ideas feature highlights: SpaceX and Tesla
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For Immediate Release
Chicago, IL – October 27, 2026– Today, Zacks Investment Ideas feature highlights SpaceX (SPCX - Free Report) and Tesla (TSLA - Free Report) .
Why SpaceX Will Have to Pay a Premium for Tesla
SpaceX Steals the Limelight from Tesla
Since its initial public offering in June 2026, SpaceX has stolen the limelight from Elon Musk's other public company, Tesla. Given SpaceX's newness, its rapid growth, and Tesla's lackluster price action, it's understandable that investors have turned their attention away from Tesla. Nevertheless, for the first time in years, Tesla has several upcoming catalysts that could propel the stock far higher. If history is any guide, the best time to buy Tesla shares is when investors are largely ignoring it.
SpaceX Will Have to Buy Tesla at a Premium
After months of Wall Street rumors and speculation, Elon Musk officially confirmed that SpaceX and Tesla are exploring a merger. During SpaceX's earnings call last week, Musk said that a merger would be a "good idea" and that each company had formed independent special committees to explore the transaction. As Tesla and SpaceX each become AI-centric companies, their shared technical stack, consolidated compute, and integrated energy ecosystem are worth far more together than they are as stand-alone entities.
Why a Tesla/SpaceX Merger is Likely in 2027
If Elon Musk wants a merger, he will have to act fast and do it with President Trump in office. Under President Biden, FTC Chair Lina Khan was a "hawk" and blocked several mergers, including Microsoft and Activision Blizzard, JetBlue and Spirit Airlines, and Kroger and Albertsons.
Additionally, several Democrats have already threatened to launch criminal investigations into Elon Musk after he donated $445 million to Republican political groups for the 2026 midterm elections. With a "dovish" FTC and a Musk-friendly administration in power, the regulatory environment is perfect for a 2027 merger. Betting markets agree. Polymarket bettors currently see a 65% chance of a 2027 merger.
Tesla Buyout Will Garner a Premium
Because of his notoriety and significant influence at both companies, a merger would spark intense fiduciary scrutiny. With a market cap of nearly $2 trillion, SpaceX would be the acquirer of the smaller Tesla (currently valued at $1.56 trillion). If a merger is to be approved, the independent special committees for both companies will need to negotiate a deal that makes sense.
With a pristine balance sheet and ~$45 billion in cash on hand, Tesla's special committee would likely shoot for at least the typical 25% traditional takeover premium. Assuming a 25% premium, Tesla shares would be worth around $500.
Additionally, SpaceX would need to sweeten the deal further because Tesla shareholders would see their voting power diluted in a combined entity.
Tesla Breaks Out After Upgrade
On Monday, Tesla shares broke out above the 200-day moving average on heavy volume after a Barclays analyst upgraded the stock to overweight and raised the price target to $450, citing SpaceX merger upside.
Bottom line
As both SpaceX and Tesla pivot toward AI, consolidation promises significant synergies, but SpaceX will ultimately have to offer a substantial premium to win over Tesla shareholders. With a favorable regulatory climate expected in 2027 and independent committees evaluating fiduciary duties, Tesla's solid cash reserves and voting structure make a valuation bump almost imperative. Investors looking past Tesla's recent lull may find that current levels offer a compelling opportunity before merger momentum takes full effect.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: SpaceX and Tesla
For Immediate Release
Chicago, IL – October 27, 2026– Today, Zacks Investment Ideas feature highlights SpaceX (SPCX - Free Report) and Tesla (TSLA - Free Report) .
Why SpaceX Will Have to Pay a Premium for Tesla
SpaceX Steals the Limelight from Tesla
Since its initial public offering in June 2026, SpaceX has stolen the limelight from Elon Musk's other public company, Tesla. Given SpaceX's newness, its rapid growth, and Tesla's lackluster price action, it's understandable that investors have turned their attention away from Tesla. Nevertheless, for the first time in years, Tesla has several upcoming catalysts that could propel the stock far higher. If history is any guide, the best time to buy Tesla shares is when investors are largely ignoring it.
SpaceX Will Have to Buy Tesla at a Premium
After months of Wall Street rumors and speculation, Elon Musk officially confirmed that SpaceX and Tesla are exploring a merger. During SpaceX's earnings call last week, Musk said that a merger would be a "good idea" and that each company had formed independent special committees to explore the transaction. As Tesla and SpaceX each become AI-centric companies, their shared technical stack, consolidated compute, and integrated energy ecosystem are worth far more together than they are as stand-alone entities.
Why a Tesla/SpaceX Merger is Likely in 2027
If Elon Musk wants a merger, he will have to act fast and do it with President Trump in office. Under President Biden, FTC Chair Lina Khan was a "hawk" and blocked several mergers, including Microsoft and Activision Blizzard, JetBlue and Spirit Airlines, and Kroger and Albertsons.
Additionally, several Democrats have already threatened to launch criminal investigations into Elon Musk after he donated $445 million to Republican political groups for the 2026 midterm elections. With a "dovish" FTC and a Musk-friendly administration in power, the regulatory environment is perfect for a 2027 merger. Betting markets agree. Polymarket bettors currently see a 65% chance of a 2027 merger.
Tesla Buyout Will Garner a Premium
Because of his notoriety and significant influence at both companies, a merger would spark intense fiduciary scrutiny. With a market cap of nearly $2 trillion, SpaceX would be the acquirer of the smaller Tesla (currently valued at $1.56 trillion). If a merger is to be approved, the independent special committees for both companies will need to negotiate a deal that makes sense.
With a pristine balance sheet and ~$45 billion in cash on hand, Tesla's special committee would likely shoot for at least the typical 25% traditional takeover premium. Assuming a 25% premium, Tesla shares would be worth around $500.
Additionally, SpaceX would need to sweeten the deal further because Tesla shareholders would see their voting power diluted in a combined entity.
Tesla Breaks Out After Upgrade
On Monday, Tesla shares broke out above the 200-day moving average on heavy volume after a Barclays analyst upgraded the stock to overweight and raised the price target to $450, citing SpaceX merger upside.
Bottom line
As both SpaceX and Tesla pivot toward AI, consolidation promises significant synergies, but SpaceX will ultimately have to offer a substantial premium to win over Tesla shareholders. With a favorable regulatory climate expected in 2027 and independent committees evaluating fiduciary duties, Tesla's solid cash reserves and voting structure make a valuation bump almost imperative. Investors looking past Tesla's recent lull may find that current levels offer a compelling opportunity before merger momentum takes full effect.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.