Reports suggest Tesla (TSLA) and SpaceX (SPCX) are advancing merger talks, and a deal could be announced as early as next month. As I noted in a previous article, the merger was always a matter of when, not if, and any doubts were laid to rest during SpaceX’s Q3 2026 earnings call last month. Elon Musk, who heads both companies, termed the merger a “good idea” during the call and said, “there's a lot of merit to combining the companies as we are pretty much in the Super Intelligence singularity.”
Tesla-SpaceX Merger Might be Announced Soon
The world’s richest person also confirmed that the two boards had formed special committees consisting of independent directors to discuss the merger. He also added that being a “conflicted party,” he won't be in discussions with the committees. Notably, Tesla stock, which slumped following its Q3 2026 earnings last month, has since rallied, largely because of the anticipated merger.
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www.barchart.comMeanwhile, SpaceX has a market cap of around $1.9 trillion, while Tesla is valued just under $1.6 trillion. The combined entity would be valued at around $3.5 trillion. Given the recent slump in Nvidia (NVDA) and Microsoft’s (MSFT) ‘SaaSpocalypse’ woes, the combined entity would have a real shot at becoming the world’s second-most valuable company, trailing Apple (AAPL). Any post-merger bullishness with a bit of “Musk” magic could make it the world’s biggest company.
Musk has long fancied Tesla becoming the world’s most valuable company, touting products like robotaxis and Optimus humanoid. During the Q3 2022 earnings call in October 2022, he argued that the company’s market cap could one day surpass the combined market cap of Apple and Saudi Aramco. Back then, the combined market cap of these two giants was in the ballpark of $4 trillion, which has since risen to almost $7 trillion. Incidentally, the multi-billionaire has an even more ambitious prediction for SpaceX and sees it growing bigger than the global GDP.
A Tesla-SpaceX Union Might Create the World’s Biggest Company
While expecting Tesla to reach the combined market cap of these two giants would have been a tall ask, a Tesla-SpaceX combination might do the trick. Since both companies don’t have the earnings to back up their market caps, the possibility of the combined entity achieving that feat would depend on how the artificial intelligence (AI) trade plays out.
The AI trade has looked on shaky ground this year as investors have been growing increasingly apprehensive about the burgeoning capex. The price action is testimony to this pessimism, as among the Magnificent 7, only Apple, Amazon (AMZN), and Microsoft are in the green. If we leave aside Apple, which never really participated in the AI arms race, only Amazon (AMZN) is outperforming the S&P 500 Index ($SPX) this year.
www.barchart.comThe Tesla-SpaceX combination would get a real boost if Musk gets the “honor” to hire Jensen Huang, and it would be a big enabler of the combined entity becoming the world’s biggest company given the Terafab chip project they are collaborating on.
Musk’s Tesla Prediction Might Only Be Partially Come True
Coming back to the eventual Tesla-SpaceX merger, we might start hearing less about the company’s automotive business during the combined entity's earnings calls. That business has sagged anyway, reporting declining volumes for two consecutive years and would incrementally become even less important to markets as well as the analyst community. That said, vehicle sales would still account for the bulk of the combined entity’s revenues at least for the initial few quarters.
Meanwhile, even though the Tesla-SpaceX combination would become the world’s most valuable company, it would only be a dream partially fulfilled for Musk, as it won't exactly be Tesla hitting that milestone. But then, count on Musk coming up with a new prediction for the combined entity soon enough.
On the date of publication, Mohit Oberoi had a position in: TSLA , AMZN , NVDA , MSFT . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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