Barclays said in a Wednesday report that, after examining possible structures for a merger between Tesla and SpaceX, market traders have materially increased the odds of the two companies combining in early next year.
CNBC reported on Oct. 16 that, in Kalshi’s "When will Tesla and SpaceX merge?" contract, the probability of a merger before March 2027 had risen to 56% by Friday morning, up from 29% previously. The odds for a merger before April and before May also moved to similar levels.
The contract will be settled based on news reports and filings on the U.S. Securities and Exchange Commission’s EDGAR system. CNBC also said it has commercial relationships with Kalshi, including customer acquisition arrangements and a minority equity investment.
Barclays points to a possible announcement before Tesla’s annual meeting
Barclays analyst Dan Levy said the merger could be announced before Tesla’s annual shareholder meeting, which must be held no later than Dec. 6, 2026.
Levy said the deal could be presented as "AI vertical integration," bringing together Tesla’s Robotaxi and Optimus humanoid robot efforts with Grok and Macrohard under SpaceX. He also said Terafab, a semiconductor project involving Tesla, SpaceX and xAI, could be a "key factor" pushing the merger forward.
"While we do expect some financial synergies, the real value lies in vertical integration," Levy said.
Existing overlap between the two companies
Both Tesla and SpaceX are controlled by Elon Musk, and the companies have already worked together. Tesla on Thursday unveiled its long-delayed new Roadster. The vehicle’s hovering capability uses SpaceX technology, and its promotional video was filmed at SpaceX’s Texas test site.
Musk also said on Tesla’s latest earnings call that there is "increasing overlap" between the two companies.
Evercore ISI raises its SpaceX target
Separately, Evercore ISI on Friday recommended buying the stock before SpaceX releases its next earnings report in early November, and raised its 12-month price target by 20% to $275.