Tesla Stock Heads for Third Day of Gains. It’s About More Than SpaceX.

Coming into Wednesday’s trading, Tesla stock was down 9% year to date and down 12% over the past 12 months. (Justin Sullivan/Getty Images)

Key Points

Tesla stock rose early Wednesday, aiming for its third consecutive gain after rising 5.2% on Monday and 4% on Tuesday.
Barclays analyst Dan Levy upgraded Tesla stock to Buy from Hold, partly due to potential merger evaluations between Tesla and SpaceX.
Deutsche Bank analyst Edison Yu expressed encouragement over Tesla’s robo-taxi progress, noting that unsupervised miles reached 3.1 million.

Tesla stock was up again early Wednesday, trying to extend recent big gains. Investors are feeling better about something. It’s hard to say what that is.

Shares of the electric vehicle maker were up 0.4% at $409.20, while S&P 500 futures were up 0.2% and Dow Jones Industrial Average futures were down 0.2%.

Tesla stock is going for three gains in a row. Shares jumped 5.2% on Monday after Barclays analyst Dan Levy upgraded Tesla stock to Buy from Hold. They jumped another 4% on Tuesday as many AI-related stocks rose.

Shares closed on Tuesday at their highest level since early July, before the company’s weaker-than-expected second-quarter earnings report.

One thing helping is SpaceX and the expectations of a merger. SpaceX and Tesla CEO Elon Musk said on SpaceX’s earnings conference call that both companies’ boards were evaluating a merger. Now, Wall Street price targets reflect merger potential. A merger was also part of the reason for Levy’s upgrade.

Tesla’s earnings followed SpaceX’s report by one day. Deutsche Bank analyst Edison Yu said he was encouraged by robo-taxi progress. “Unsupervised miles reached 3.1 million as of Oct. 18, up nearly 9 times in the past three months by our estimates,” wrote Yu in a recent report. “Cybercab entered paid service in Austin on Sept. 3, and the local fleet expanded about 10 times since launch.”

Tesla robo-taxis run the latest version of the company’s Full Self-driving software, which is slated for consumer release later this year. Today, FSD requires driver supervision 100% of the time. Yu believes Tesla owners will be able to stop paying attention in certain situations in the first half of 2027. That could be another catalyst for the stock.

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

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