Tesla and SpaceX could soon become a single corporate behemoth, according to Wedbush Securities analyst Dan Ives. A recently issued research note predicted that Elon Musk's two most valuable companies would merge into a single entity by 2027.
Ives argues that the groundwork is already actively being laid and points to the newly announced Terafab project as the ultimate catalyst for this historic combination.
The TERAFAB Connection
During the recent TERAFAB launch event in Austin, Elon Musk revealed a massive joint chip manufacturing facility intended to serve both Tesla and SpaceX simultaneously. According to Ives, this physical overlap of infrastructure is the vital first step toward merging their vast operations.
By building shared facilities to produce next-generation silicon like the AI5, AI6, and D3 space chips, the two companies are already operating with a highly unified hardware roadmap that makes a formal corporate merger highly feasible in the near future.
Laying the Financial Groundwork
The financial ties between the two companies are also tightening at a rapid pace. Earlier this year, SpaceX officially acquired Musk's artificial intelligence startup known as xAI, and as part of that transaction, Tesla's previous $2 billion investment in xAI was converted directly into SpaceX shares. While this currently represents less than a 1% stake in SpaceX, it officially links the two companies financially for the first time.
The next major milestone on this timeline is a highly anticipated SpaceX initial public offering, which is reportedly targeting an incredible $1.75 trillion valuation to raise roughly $75 billion by mid-June of 2026. Ives suggests that completing this public offering is a necessary sequence before any formal merger with Tesla can ultimately occur.
The Ultimate AI Ecosystem
Combining an automaker with a space exploration company might seem unorthodox, but Ives notes that this strategy is all about dominating the future of artificial intelligence. Musk has frequently stated his desire to build a vertically integrated innovation engine, and by merging Tesla and SpaceX, he would successfully consolidate his sprawling AI ecosystem under one unified roof.
This super-company would command the terrestrial robotics of Optimus alongside the autonomous driving data of Tesla and the orbital AI compute infrastructure of SpaceX. A merger would consequently give Tesla direct access to the massive space-based data centers necessary to train the next generation of neural networks without having to rely on an overloaded terrestrial power grid.
The Upside for Tesla
Despite the massive regulatory and antitrust hurdles a merger of this scale would undoubtedly face, Wedbush remains incredibly bullish on the prospect. Ives views this combination as the ultimate strategy for Musk to cement his control over a disruptive technology empire, and he has reiterated his Outperform rating on Tesla stock as a result.
He maintains a massive $600 price target for the automaker, which implies an upside of nearly 66 percent from current trading levels of $360. If this bold prediction holds true, 2027 could mark the dawn of the most powerful technology conglomerate in human history.
