Tesla stock was up in early trading on Monday. Shares of Elon Musk's EV company are becoming closely linked with shares of his rocket and AI company, SpaceX.
There's a good reason for that.
Stocks in the two companies have moved in the same direction lately. Coming into Monday trading, Tesla stock had gained for two consecutive weeks, just like SpaceX stock. Before that, Tesla stock was on a three-week losing streak, while SpaceX shares dropped for four consecutive weeks. Overall, both shares have moved in the same daily direction about two-thirds of the time over the past several weeks.
One reason for the growing correlation is the growing belief on Wall Street that Tesla and SpaceX will merge. There are many reasons, including Musk, who leads both companies. Another is AI. Both are investing heavily in the new technology.
"A potential SpaceX/Tesla combination would represent a compelling strategic and financial proposition for Tesla shareholders," wrote RBC analyst Tom Narayan in July. "A deal would likely create a uniquely powerful vertical-integration-from-orbit-to-ground-AI ecosystem, which combines Starlink's connectivity flywheel, Tesla's physical-world AI deployment, and SpaceX's orbital compute infrastructure."
Starlink is SpaceX's space-based broadband product. Tesla's "physical" AI includes robo-taxis and robots.
Narayan covers Tesla for the broker. Ken Herbert, who covers SpaceX at RBC, contributed to the report.
Narayan sees SpaceX offering a premium to Tesla shareholders to win approval for the deal. How much of a premium is hard to say. It's easier to say that a potential merger has become a factor influencing Tesla trading. Recently, it has likely become more important than Tesla's robo-taxi deployments and robotics updates, which dominated investor sentiment early in 2026. ARK Invest's Chief Futurist Brett Winton recently said that a merger could be announced this year. ARK holds both SpaceX and Tesla stocks.
Of course, it's impossible to predict when (or if) a merger will be announced, but for now, investors have to be aware that the possibility is moving Tesla shares.
Comments