Ives Sees 80% Chance Tesla and SpaceX Merge, Creating a Market Giant

Wedbush analyst Dan Ives has assigned a probability of over 80% to a merger between Tesla and SpaceX taking place within the next 18 months. He believes the resulting entity could claim the title of the most valuable company on the planet.

The analyst made these comments amid a broader discussion on whether the current AI-fueled rally can sustain its momentum. Ives and Fundstrat's Tom Lee addressed a downturn that saw semiconductor stocks fall approximately 19% from their peak levels. The S&P 500, in contrast, was trading merely 2.6% below its all-time high.

The Rationale Behind a Tesla-SpaceX Combination

Ives contended that Tesla (TSLA) and SpaceX (SPCX) are moving toward a convergence in their technological and data infrastructure. The two companies, both led by Elon Musk, share more than just a chief executive, according to the analyst.

A merger would allow investors to gain access to Tesla's artificial intelligence projects and SpaceX's rocket and satellite operations through a single stock ticker.

Ives has described physical AI, encompassing autonomous systems and robotics, as the most significant opportunity in the sector. He directly links the case for a Tesla-SpaceX merger to that concept.

The Wedbush analyst has also based much of his optimistic outlook on the gap in chip technology between the U.S. and China. He has stated that demand for AI chips exceeds supply by a ratio of roughly 13 to 1, a disparity he expects will last for years.

“Tesla and SpaceX ultimately merge.”

Dan Ives, on The Compound podcast

Ives made a comparable forecast on CNBC in July. At that time, he placed the likelihood of SpaceX taking over Tesla at above 80%. That was higher than the 69% probability that Kalshi's prediction market assigned to a merger occurring before 2028.

SpaceX's own shares have experienced significant volatility since their market debut in June, a trend that one BeInCrypto analysis likened to Meta's 2012 decline.

The analyst did not provide specifics on how a merger might be organized or when shareholders might be called upon to vote on it.

Whether Musk will proceed with combining a publicly traded automaker with a private rocket and AI firm is still uncertain. It is also unclear how regulators would view the consolidation of two companies of such scale.