Dan Ives from Wedbush predicts the probability of a merger between Tesla and SpaceX at more than 80% within the next year and a half. He believes that the combined company could become the largest in the world by market capitalization. These comments came amid discussions on whether the bull market, driven by artificial intelligence, can continue to rise. Ives and Tom Lee from Fundstrat were reacting to the semiconductor sector's stock drop by 19% from its highs, while the S&P 500 index remained just 2.6% below its record.
Ives noted that Tesla and SpaceX provide similar technologies and data infrastructure, linking the two companies led by Elon Musk. The merger would give investors access to both Tesla's ambitions in artificial intelligence and SpaceX's rocket-satellite business under one stock. He identified physical AI, including autonomous technologies and robotics, as the industry's main prize and ties the case for a Tesla and SpaceX merger to this theme.
Part of Ives' optimism is linked to the chip production gap between the US and China, asserting that the demand for AI chips exceeds supply by 13 times. He expects this gap to persist for many years. “Tesla and SpaceX will eventually merge,” Ives stated in The Compound podcast. Ives gave a similar prediction to CNBC in July, estimating the likelihood of Tesla being acquired by SpaceX at over 80%. This is more than the 69% that the Kalshi prediction market allotted for a merger by 2028. SpaceX shares have fluctuated sharply since their June debut – one comparison published by BeInCrypto drew parallels with Meta's crash in 2012.
Ives did not specify how the merger would be structured or when shareholders would be able to vote on it. The question of how Musk will move towards merging a public automaker with a private rocket company remains open, as does the regulators' stance on such a large-scale merger.
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