Investors Weigh SpaceX AI Spending and Potential Tesla Merger

SpaceX's accelerating investment in artificial intelligence and growing speculation about a potential merger with Tesla are drawing investor attention as Elon Musk's companies prepare to report quarterly earnings on October 20 and October 21, 2026. Analysts are examining the financial implications of SpaceX's expanding computing infrastructure and the possibility of combining its space and AI operations with Tesla's electric vehicles, robotics, and autonomous driving businesses.

According to The New York Times, SpaceX's AI spending reached $15.8 billion in the previous quarter, more than double its spending in the quarter before that. The company is investing in large-scale data centers to meet rising computing demand, while investors are assessing whether those expenditures can support sustainable growth.

SpaceX is scheduled to report earnings on October 20, followed by Tesla on October 21. The companies' financial disclosures are expected to provide investors with additional information about their operations and investment priorities.

According to Yahoo Finance, RBC Capital Markets lead equity analyst Tom Narayan said a potential combination would likely require SpaceX to acquire Tesla through an all-stock transaction.

"It's not so easy. Basically, SpaceX would have to acquire Tesla. We think it'd be an all-stock deal," said Tom Narayan, RBC Capital Markets lead equity analyst.

Narayan's assessment reflects the companies' different ownership structures. Musk controls 85% of SpaceX's voting rights and 20% of Tesla's, according to Yahoo Finance.

He also outlined the potential price implications of a transaction, emphasizing the premium Tesla shareholders might demand.

"There would have to be a pretty strong premium in order to acquire Tesla," said Narayan. "We think something like a $480 stock price for Tesla; it's our price target."

The proposed combination has attracted attention because SpaceX's satellite and computing infrastructure could complement Tesla's autonomous vehicles and humanoid robots. The companies also have overlapping interests in semiconductor development, including Terafab, an ambitious initiative intended to bring advanced chip manufacturing in-house.

Narayan identified chip production as a potentially significant strategic objective, particularly if Musk's companies could reduce their dependence on external suppliers.

"This is their way of bypassing Nvidia and bypassing TSMC," said Narayan. "If they can do that, it's huge."

USA TODAY reported that merger speculation intensified after Tesla unveiled a redesigned Roadster on October 15. The vehicle's demonstration featured aerial maneuvers and built-in thrusters, highlighting technology associated with the two companies' engineering capabilities.

The Roadster's development has taken years longer than initially anticipated. Tesla first presented a prototype of the second-generation model in 2017 and projected deliveries for 2020, but production is now scheduled to begin in 2028, according to USA TODAY.

The same publication reported that Barclays analysts wrote in an October 14 client note that a merger announcement could arrive before Tesla's December 3 annual meeting. Bloomberg also reported that investors increasingly viewed a combination as a likely possibility, although neither company had announced an agreement.

During an appearance at the All-In Summit in September, Musk addressed the extensive cooperation between his businesses without confirming a transaction.

"With all this collaboration, on so many levels, who can imagine what action one might take when there's so much close collaboration in so many areas," said Musk.

Business ties between the companies extend beyond their public statements. USA TODAY reported that SpaceX purchased Cybertrucks and that SpaceX also purchased utility-scale batteries through xAI. Their overlapping investors and joint semiconductor ambitions have added to speculation about a more integrated corporate structure.

Separately, Tech Insider reported that SpaceX President and Chief Operating Officer Gwynne Shotwell followed Tesla's official account on X on October 18. The social media activity prompted further discussion, but neither company issued a statement connecting the action to a possible merger, and no transaction had been announced.

Tech Insider also described personnel movements between SpaceX and xAI, including efforts to address leadership and engineering needs. The report noted that the extent of integration between the organizations remained unclear.

SpaceX's AI investments have become a central consideration for investors as demand for computing power increases. Meanwhile, Tesla's share price was down approximately 18% year to date, closing just above $368 on Monday, according to Yahoo Finance. SpaceX shares were trading near $148 on Monday after the company's June initial public offering priced shares at $135 and opened at $150.