Tesla (TSLA) shares could surge roughly 20% as analysts factor in a growing probability of a merger with SpaceX, according to a new note from RBC Capital Markets.
RBC analyst Tom Narayan raised his price target on Tesla to $500 from $475, incorporating both a revised standalone valuation and a premium tied to a potential SpaceX transaction.
Narayan said the updated target reflects “a 25-30% premium to current trading levels (and a 15% premium to the stock’s intrinsic value) owing to a potential SpaceX acquisition scenario based on unconfirmed media reports.”
The new $500 target implies approximately 19.1% upside from Tesla’s recent closing price of $419.77, while RBC maintained its Outperform rating on the stock.
RBC believes the most likely deal structure would be an all-share acquisition, with SpaceX purchasing Tesla at a premium of between 20% and 30% above current market value.
The strategic rationale, according to RBC, would center on operational synergies including proprietary semiconductor manufacturing, Megapack energy storage systems for data centers, and deeper collaboration on artificial intelligence training and fleet management technologies.
The firm also noted that existing Tesla shareholders would likely demand a premium because Elon Musk “would control 50%+ of a combined entity, well above the ~20% stake he currently holds in Tesla.”
Stripping out any merger scenario, RBC estimates Tesla’s standalone intrinsic value at $435 per share, with the robotaxi business described as “currently Tesla’s most robust opportunity” within an estimated total addressable market of $4.2 trillion.
RBC increased its robotaxi valuation by 20% on the back of a larger projected global fleet, but cut its humanoid robotics valuation by roughly 40%, revising Tesla’s projected US market share down to 20% from a prior estimate of 50%.
The firm also reduced its valuation for Tesla’s energy storage division by 30%, citing a smaller projected global market and intensifying competitive pressures in that segment.
Wedbush analyst Dan Ives has separately put the odds of a Tesla-SpaceX merger at over 80%, reiterating that such a deal could materialise within the next year.
SpaceX listed on the Nasdaq following its acquisition and merger with xAI, Musk’s artificial intelligence venture, with the two companies also announcing Terafab, a joint chip manufacturing facility originally projected at $25 billion.
Narayan was explicit that the SpaceX scenario remains based on unconfirmed media reports and is not baked into RBC’s base case valuation for Tesla.
Rather than treating a merger as a certainty, RBC is applying a probability-weighted premium layered on top of Tesla’s existing robotaxi and artificial intelligence valuation drivers.
The divergence between the $435 intrinsic value estimate and the $500 price target illustrates just how much weight Wall Street is now assigning to a potential combination of two of Musk’s most valuable companies.
