Tesla (TSLA) is no longer just an electric vehicle company. If you’ve been paying attention to Elon Musk’s recent moves, a much bigger picture is emerging: one in which Tesla and SpaceX could eventually become the same company.
That’s the view of Wedbush analyst Dan Ives, who recently reaffirmed his prediction that the two companies will merge in 2027. In his view, the groundwork is already being laid and financial and operational ties between the two companies are rapidly tightening.
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According to a teslarati report:
One of the clearest signs of convergence is the announcement of a joint Terafab facility in Austin, Texas.
The plan provides for two advanced chip factories. One would cover Tesla’s artificial intelligence needs for its Optimus vehicles and robots. The other would target space data centers according to SpaceX’s vision.
Ives calls Terafab the “first step” toward full operational integration between the two companies.
On Tesla’s fourth-quarter earnings conference call, Musk himself explained why chips are so critical. He said he sees chip production as the biggest constraint on Tesla’s growth over the next three or four years.
He even raised the possibility of building a completely new semiconductor factory because, in his words, production from existing suppliers, even from partners like TSMC (TSM), Samsung and Micron (MU), may simply not be enough.
Tesla invested $2 billion in xAI, Musk’s artificial intelligence startup. When SpaceX acquired xAI earlier this year, that investment became a small equity stake in SpaceX: less than 1% of the company’s expected valuation, but a stake nonetheless.
Regulatory documents that cleared the transaction in March 2026 formally connected the two Musk-led companies for the first time.
During the earnings call, Tesla CFO Vaibhav Taneja pointed this out directly, saying that the investment in xAI was part of Tesla’s Master Plan IV and that Grok, xAI’s AI model, is already being used in Tesla vehicles.
The idea is that Grok could help manage a massive autonomous fleet at scale. Musk added that if Tesla eventually operates tens of millions of autonomous vehicles, an artificial intelligence system like Grok would be essential to coordinate the entire network efficiently.
SpaceX is preparing for a public offering expected in mid-2026. The company is reportedly targeting a valuation of around $1.75 trillion and aims to raise approximately $75 billion. That capital would fund Starship flights, a NASA-contracted lunar base, expanded Starlink services and orbital artificial intelligence infrastructure.
The orbital angle of AI is where things get fascinating. teslarati claims that US data centers are expected to consume 470 terawatt-hours of electricity by 2030. That’s a staggering amount, and Earth’s power grids are already struggling to keep up.
The solution proposed by SpaceX is to host data centers in orbit, powered by solar energy captured in space, which avoids the energy losses that occur in the Earth’s atmosphere and does not suffer from day-night cycles.
For Tesla, access to that orbital computing capacity could speed up everything from autonomous driving to training Optimus robots to optimizing the Robotaxi fleet.
It’s worth basing all of this on what Tesla is actually doing today. On the fourth-quarter earnings conference call, Musk announced that the Model S and Cybercab production will begin in April, while unsupervised robotaxi rides are already taking place in Austin, without a safety monitor or pursuit vehicle.
Tesla ended 2025 with automotive gross margins of 17.9%, up from 15.4% in the previous quarter. The energy business reached almost $12.8 billion in annual revenue. And the company is planning more than $20 billion in capital expenditures by 2026, spanning six new factories, AI computing infrastructure and fleet expansion.
Wedbush maintained its “outperform” rating and $600 price target on Tesla, calling the merger with SpaceX the “holy grail” to solidifying Musk’s tech empire. It’s unclear if that merger will happen, but what is clear is that Tesla’s trajectory is moving away from a car company toward something much more ambitious.
Of the 43 analysts covering TSLA stock, 15 recommend “Strong Buy”, two recommend “Moderate Buy”, 17 recommend “Hold” and nine recommend “Strong Sell”. The average price target for Tesla shares is $408, up from the current price of around $362.
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On the date of publication, Aditya Raghunath had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
