SpaceX, considering an IPO, is also mulling a merger with Tesla or xAI, per Bloomberg. Tesla shares rose 3% in after-hours trading on Jan. 29, 2026. Elon Musk is a major shareholder in all three companies, signaling possible consolidation. An integration between Tesla and SpaceX could have mutual benefits, such as utilizing SpaceX’s space data centers for Tesla’s AI operations.

No deal announced yet, so Morningstar maintains a USD 400 fair value estimate for Tesla. Stock currently viewed as fairly valued, slightly above fair value estimate. Tesla transitioning from automaker to AI leader, with autonomous driving software and robots. While merger with SpaceX is considered, AI development remains key driver for Tesla’s stock.

Editor’s Note: Analysis was published by Morningstar Equity Research. The author does not own shares in any mentioned securities.

Read more at Morningstar: Tesla: Shares Rise on Media Report of Potential Merger With SpaceX