Why Tesla Stock Moves Are Increasingly Tied to SpaceX

Coming into Monday trading, Tesla stock was down 24% so far this year. (PATRICK T. FALLON/AFP via Getty Images)

Key Points

• Tesla and SpaceX shares rose in early trading on Monday, with the two stocks becoming closely linked.
• Wall Street increasingly believes that Tesla and SpaceX will merge, which has become a factor influencing Tesla trading.
• RBC analyst Tom Narayan wrote that a potential combination would represent a compelling strategic and financial proposition for Tesla shareholders.

Tesla stock was up in early trading on Monday. Shares of Elon Musk’s EV company are becoming closely linked with shares of his rocket and AI company, SpaceX.

There’s a good reason for that.

Tesla shares rose 0.3% at $343.40, while S&P 500 futures were up 0.2%. SpaceX stock was up 0.9% at $141.29.

Stocks in the two companies have moved in the same direction lately. Coming into Monday trading, Tesla stock had gained for two consecutive weeks, just like SpaceX stock. Before that, Tesla stock was on a three-week losing streak, while SpaceX shares dropped for four consecutive weeks. Overall, both shares have moved in the same daily direction about two-thirds of the time over the past several weeks.

One reason for the growing correlation is the growing belief on Wall Street that Tesla and SpaceX will merge. There are many reasons, including Musk, who leads both companies. Another is AI. Both are investing heavily in the new technology.

“A potential SpaceX/Tesla combination would represent a compelling strategic and financial proposition for Tesla shareholders,” wrote RBC analyst Tom Narayan in July. “A deal would likely create a uniquely powerful vertical-integration-from-orbit-to-ground-AI ecosystem, which combines Starlink’s connectivity flywheel, Tesla’s physical-world AI deployment, and SpaceX’s orbital compute infrastructure.”

Starlink is SpaceX’s space-based broadband product. Tesla’s “physical” AI includes robo-taxis and robots.

Narayan covers Tesla for the broker. Ken Herbert, who covers SpaceX at RBC, contributed to the report.

Narayan sees SpaceX offering a premium to Tesla shareholders to win approval for the deal. How much of a premium is hard to say. It’s easier to say that a potential merger has become a factor influencing Tesla trading. Recently, it has likely become more important than Tesla’s robo-taxi deployments and robotics updates, which dominated investor sentiment early in 2026. ARK Invest’s Chief Futurist Brett Winton recently said that a merger could be announced this year. ARK holds both SpaceX and Tesla stocks.

Of course, it’s impossible to predict when (or if) a merger will be announced, but for now, investors have to be aware that the possibility is moving Tesla shares.

Write to Al Root at allen.root@barrons.com.

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