Veteran tech investor Gene Munster believes there is a greater than 50% chance that Tesla and SpaceX could merge within the next five years, potentially creating the world's most valuable company by combining physical AI, energy infrastructure, chip design, and satellite distribution. The merger speculation intensified as SpaceX prepares for what could become the largest initial public offering (IPO) ever, with a reported valuation above $2 trillion and potential fundraising of up to $75 billion.

What Would a Tesla-SpaceX Merger Actually Create?

Munster outlined a compelling vision for what he calls a "sovereign AI company," one that would control the complete technology stack from energy generation to chip design, chip manufacturing, and distribution through Starlink, SpaceX's satellite internet service. The platform would also include Grok, Elon Musk's artificial intelligence model. However, Munster identified one critical missing piece: physical AI, which Tesla's Optimus humanoid robot could provide.

Munster

"My sense is that the investment thesis around SpaceX is going to become a sovereign AI company," Munster stated. "I believe AI is at the highest, his highest level of importance. I think that he does see this as an existential risk to humanity and also sees the opportunity around AI as being bigger than kind of all these sum of the parts."

Gene Munster, Veteran Tech Investor

To understand the scale of such a combination, consider the current market values: Tesla carries a market capitalization of approximately $1.5 trillion, while SpaceX is rumored to be worth around $1.7 trillion ahead of its expected IPO. Munster suggested that merging these companies into a fully integrated platform could create the most valuable company in the world.

How Would Vertical Integration Accelerate AI Adoption?

Munster emphasized that the merger would accelerate the adoption of AI technologies through vertical integration. He noted that employees across Musk's various companies already work across organizational boundaries and frequently refer to "working for Elon" rather than for a specific company, suggesting the businesses already function as parts of a wider interconnected ecosystem.

• Energy Infrastructure: SpaceX's capabilities combined with Tesla's renewable energy and battery technology would create a complete power ecosystem for AI operations.
• Chip Design and Manufacturing: Control over semiconductor production would eliminate supply chain dependencies for AI hardware.
• Distribution Network: Starlink's global satellite coverage would provide worldwide connectivity for AI services and physical robots.
• Physical AI Deployment: Tesla's Optimus robots would give the merged company a platform for real-world AI applications beyond software.
• AI Models: Grok would serve as the underlying large language model powering the entire ecosystem.

What Are Tesla's Near-Term Growth Catalysts?

Beyond merger speculation, Munster outlined specific milestones that could drive Tesla's stock price higher. He identified three major areas where visible progress could trigger a significant re-rating of the company's valuation: Robotaxi deployment at scale, physical AI adoption through Optimus, and successful autonomous driving execution.

Munster suggested that Tesla could potentially reach $600 per share by the end of 2027 if the company successfully executes across these three areas. One particularly important psychological and commercial validation milestone, according to Munster, would be when Tesla crosses approximately 5,000 operational Robotaxis in active service.

Currently, Munster characterized Optimus as still being in "science project" stage, but he emphasized that the humanoid robot platform could eventually become larger than Tesla's core automotive business if physical AI adoption accelerates over time. This suggests that investors should view Tesla not primarily as a car company, but as an AI and robotics company that happens to manufacture vehicles.

How Are Retail Investors Reacting to SpaceX IPO Plans?

Retail sentiment on the Stocktwits platform reveals sharply different perspectives on the upcoming SpaceX IPO and its implications for Tesla. While Tesla sentiment remained "bullish" with "normal" message volume as of May 18, SpaceX sentiment turned "extremely bullish" with "extremely high" chatter, suggesting retail investors are particularly excited about the space company's public debut.

However, not all retail traders view the SpaceX IPO positively for Tesla shareholders. Some expressed concern that the massive capital raise could pull resources and investor attention away from Tesla, potentially creating a near-term headwind for the electric vehicle manufacturer's stock price. SpaceX is expected to begin its IPO process within days, with a potential June Nasdaq debut under the ticker "SPCX," and Musk has publicly stated he has no plans to sell any SpaceX shares after the listing.

Year-to-date performance shows Tesla lagging several of its "Magnificent Seven" technology peers, with the stock down approximately 6% as of the reporting period, making it the third-worst performer in that elite group.