Key Morningstar Metrics for Tesla
- Fair Value Estimate: USD 400
- Morningstar Rating: ★★★
- Morningstar Economic Moat Rating: Narrow
- Morningstar Uncertainty Rating: Very High
Bloomberg reported, citing unnamed sources, that SpaceX, which is considering an initial public offering later this year, is also considering a merger with Tesla TSLA or xAI. Tesla shares were up 3% at the time of writing in after-hours trading on Jan. 29, 2026.
Why it matters: Tesla CEO Elon Musk is a major shareholder of all three firms. The news that SpaceX executives are considering mergers with other Musk companies signals Musk may be considering eventually consolidating his companies into a single conglomerate.
- An integration between Tesla and SpaceX would benefit both companies. SpaceX’s plan to build data centers in space could be used by Tesla’s real-world artificial intelligence operations. SpaceX’s Starlink Wi-Fi system could also provide connectivity for Tesla’s autos and eventually robots.
- Additionally, Tesla’s Optimus robots could eventually be trained to be useful in SpaceX’s operations, both in manufacturing and in space. This could accelerate SpaceX’s growth plans over the long term.
The bottom line: For now, we maintain our USD 400 fair value estimate for narrow-moat Tesla as no deal has been announced. Until a potential deal between Tesla and SpaceX moves forward, our valuation will assume no deal occurs.
- At current prices, we view Tesla shares as fairly valued, with the stock trading slightly above our fair value estimate and in 3-star territory.
- Tesla is in the midst of a transition from automaker to real-world AI leader, through its autonomous driving software and development of humanoid robots. While a merger with SpaceX is being considered, we think Tesla’s pace of AI development will continue to be the main driver of the stock.
