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Wall Street has started to talk seriously about a once unthinkable idea, that Elon Musk could fold Tesla and SpaceX into a single company. The speculation sharpened on June 22, 2026, when Jefferies cut its price target on Tesla to $375 from $350 and warned that the stock is increasingly trading like a SpaceX proxy rather than on its own electric vehicle business. The firm wrote that a “consensus that a merger will be next and soon may turn TSLA into a tracker as shareholders try to minimize stake dilution,” capturing a shift in how investors are valuing Tesla and tying its fortunes to the rocket and satellite company that just completed the largest IPO in history.
The idea had been building for days. A Bloomberg Opinion piece on June 17 argued that SpaceX and Tesla were inching closer together and raised the prospect of a combined company large enough to rival Nvidia, and the Jefferies note five days later turned that argument into a concrete call on Tesla’s stock. The logic behind the chatter starts with SpaceX’s debut. SpaceX went public in June and quickly became one of the most valuable companies in the world, a move that turned Musk’s most prized private asset into a tradable stock and pushed his personal net worth past the trillion dollar mark.
The pieces that would knit the two together are already in motion. SpaceX reportedly acquired Musk’s artificial intelligence company xAI, the maker of the Grok models, earlier in 2026, folding a major AI effort into the same structure as the launch business. Tesla and SpaceX have also reportedly agreed a joint venture to build Terafab, a large semiconductor fabrication plant, a project that links the two companies at the level of manufacturing and supply. Each of these moves blurs the lines between Musk’s businesses, which is part of why merger talk no longer sounds far fetched to the analysts watching them.
For Tesla shareholders, the framing cuts both ways. Trading like a SpaceX proxy can lift the stock when enthusiasm for SpaceX runs high, but it also means Tesla’s price moves on factors that have little to do with how many cars it sells. Tesla shares have been under pressure, down about 7 percent so far in June and on track for a monthly loss, even as the SpaceX story dominates headlines. The Jefferies target cut reflects a view that Tesla’s core automotive business faces real challenges, including a small robotaxi fleet and a slowing growth narrative, that a rising SpaceX cannot paper over indefinitely.
A merger would also raise hard questions that the speculation tends to skip. Combining two public companies with different shareholder bases, different risk profiles, and different regulatory exposure is complex, and a deal that ties a carmaker to a rocket and defense contractor would invite scrutiny from regulators and investors alike. There is no indication that Musk has committed to such a move, and the current discussion is analyst speculation rather than a stated plan. What has changed is that the idea is now being modeled and debated in public rather than dismissed.
The deeper signal is how completely Musk’s empire has converged in the eyes of the market. SpaceX reportedly absorbed xAI, Tesla and SpaceX are reportedly building a chip plant together, and Tesla’s stock is moving on SpaceX sentiment, all of which makes the companies feel less like separate ventures and more like divisions of a single enterprise. Whether that convergence ends in a formal merger or simply continues as a web of overlapping ownership and joint projects, the line between Tesla and SpaceX keeps getting harder to draw.
For now the talk remains talk, but it reflects a real change in how investors think about Musk’s businesses. The SpaceX IPO did more than mint a trillionaire and set a record. It put a public price on the company that anchors the whole empire, and in doing so it turned a hypothetical question into one Wall Street is now willing to ask out loud. The coming months will show whether the merger chatter fades or whether Musk decides to act on it.
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