SpaceX IPO, Long-Term Positive for Tesla’s Investment Logic

TradingKey - SpaceX debuted on the Nasdaq on June 12, with an overall enterprise IPO valuation of $1.77 trillion and $75 billion raised, making it the largest IPO in global history.

Behind the clamor on Wall Street regarding SpaceX's valuation controversy and the AI bubble, the long-term benefits of SpaceX's listing for Tesla investors are hidden within a subtle yet increasingly clear logical chain: equity appreciation, merger expectations, and the collaborative construction of an AI ecosystem. This may be the most undervalued long-term investment narrative at present.

Tesla is already an indirect beneficiary shareholder of SpaceX.

Many investors have yet to realize that the relationship between Tesla and SpaceX extends beyond just having the same founder; Tesla is already a major shareholder in SpaceX.

According to SpaceX's IPO prospectus filed with the SEC, Tesla holds 18.99 million shares of SpaceX. Based on the offering price of $135 per share, the market value of the position stands at $2.56 billion. This is not just about the value of the holding itself, but also signifies that Tesla and SpaceX have long been deeply bonded through capital ties.

SpaceX's initial public offering will provide Tesla with both direct and indirect benefits.

On a direct level, the fair value of the position will be revalued from its book value to public market pricing, leading to a significant non-cash gain on Tesla's balance sheet; indirectly, SpaceX will secure approximately $75 billion in capital post-IPO, becoming one of the most financially robust tech companies on Wall Street, and this financial flexibility will indirectly enhance Tesla's strategic margin of safety through supply chain collaboration.

Merger expectations

Wall Street anticipates that the prospect of a SpaceX-Tesla merger following a SpaceX IPO has become a pivotal narrative driving a revaluation of Tesla’s long-term investment thesis.

Wolfe Research analyst Emmanuel Rosner noted, following discussions with institutional investors, that "the possibility of an eventual merger between SpaceX and Tesla has increasingly become a consensus view, with some institutions now citing it as a primary rationale for holding Tesla shares." Peter Diamandis, an early SpaceX investor, was even more direct, stating a merger is "inevitable," with the timing being the only uncertainty.

Rosner identified three primary drivers behind the merger: Musk’s consolidation of voting control (with his voting power expected to exceed 50% post-merger); the massive AI synergy potential from combining Tesla’s real-world datasets with SpaceX’s computing power; and the creation of a more formidable capital base.

While a merger would involve a substantial premium and face significant regulatory hurdles, the anticipation itself is providing structural support for Tesla’s share price; even without a finalized deal, the market is beginning to price in this long-term call option.

According to prediction markets, Kalshi traders currently see a 50% probability of a Tesla-SpaceX merger by May 2027, while Polymarket estimates the odds at 43%.

AI Collaborative Narrative

The most profound benefit of a SpaceX listing for Tesla is that it prompts capital markets to reassess Tesla's identity; it is no longer a traditional automaker, but a core company in physical artificial intelligence.

JPMorgan analyst Rajat Gupta recently upgraded Tesla from Underweight to Neutral and sharply raised the price target from $145 to $475, a 228% increase. Gupta’s central thesis is the redefinition of Tesla as a robotics and AI investment play, rather than a traditional automaker, highlighting Tesla’s unparalleled vertical integration advantages across hardware and software.

In Musk’s blueprint, the synergy between SpaceX and Tesla is shifting from sporadic collaboration toward systemic integration.

SpaceX has procured over $500 million in Tesla Megapack energy storage units and $130 million in Cybertrucks; both firms share R&D resources and engineering talent. SpaceX utilizes Starship for transporting Tesla robots, while Tesla integrates real-world driving data with SpaceX’s computational power to create an AI training loop.

This collaborative model of terrestrial data and space-based computing is gradually establishing a recognition of a differentiated moat within capital markets.

Risks and Divergence

Investors also need to recognize that a significant gap exists between the long-term bullish narrative surrounding a SpaceX IPO and Tesla's current profitability. With SpaceX losing $4.94 billion last year and Tesla's core profit at approximately $2.3 billion, their combined $7.2 billion is insufficient to justify a joint valuation exceeding $3 trillion.

Wolfe Research has explicitly warned that Tesla must deliver tangible results in its Robotaxi and Optimus projects to generate upside momentum, as growth curves in these sectors are proving flatter than previously anticipated.

Wall Street's price targets for Tesla remain sharply divided, reflecting a fundamental divergence in analyst opinions on when the AI narrative will finally materialize.

For long-term investors, the primary value of a SpaceX listing lies in its systematic reshaping of the market's valuation framework for Tesla.

The post-IPO capital strength of SpaceX, the increasing clarity of merger expectations, and the ongoing validation of AI synergies serve as the primary engines for this re-rating. Over the next 12 to 18 months, tracking capital integration progress, Robotaxi fleet expansion, and the implementation of FSD v15 will be critical in determining if this narrative can yield actual returns.