Elon Musk declined to rule out a Tesla and SpaceX merger on Wednesday's earnings call, prompting one longtime investor to lift his odds to 90%. Key Points: Musk pointed to growing overlap bet
Elon Musk declined to rule out a Tesla and SpaceX merger on Wednesday's earnings call, prompting one longtime investor to lift his odds to 90%.
- Musk pointed to growing overlap between the two companies but said an earnings call was not the place to discuss combining them.
- Deepwater Asset Management's Gene Munster raised his odds of a tie-up to 90% from 80% after hearing the exchange.
- Tesla posted record second-quarter revenue of $28.24 billion while adjusted earnings of 33 cents a share missed estimates badly.
Wells Fargo analyst Colin Langan asked whether combining the two companies would eventually produce synergies, and Elon Musk hinted at convergence without committing to anything.
He told investors the businesses show more and more overlap, singling out Terafab, the semiconductor project the two are building together in Texas. He called it a gigantic undertaking.
Then he shut the topic down, saying any discussion of combining companies has to run through the appropriate process rather than a quarterly call. General counsel Brandon Ehrhart followed with a careful answer, describing SpaceX as a partner tied to Tesla through an equity stake and a framework agreement signed earlier this year.
Musk spent the next several minutes cataloguing the links instead. He said Starlink is going into the Cybercab and eventually every Tesla sold in markets where the service operates, because robotaxis cannot lose connectivity mid-trip. He also said Grok will manage the Optimus humanoid robot, and that Tesla would struggle to scale that product without Terafab.
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Gene Munster, managing partner at Deepwater Asset Management, wrote on X that the exchange changed his thinking.
He raised his odds of a combination within the next few years to 90%, up from 80% going into the call, saying he was surprised executives engaged with the question at all.
The timing matters because the quarter itself gave shareholders little else to celebrate. Revenue climbed 26% to $28.24 billion, but adjusted earnings of 33 cents a share missed Wall Street forecasts by a wide margin, and operating income fell to $398 million.
Chief Financial Officer Vaibhav Taneja said capital spending would top $25 billion this year and keep rising, leaving free cash flow about $1 billion in the red.
Merger talk has trailed Musk since he began stitching his companies together in earnest. SpaceX absorbed xAI in February, producing a combined entity valued at $1.25 trillion, and Tesla's $2 billion investment in the AI startup converted into a small SpaceX stake as part of that reshuffle.
The rocket maker then raised $75 billion in a June listing, the largest on record, though the shares have fallen sharply from their peak in the weeks since.
Tesla stock is down about 17% for the year. Musk has run this play before, absorbing SolarCity in 2016 and folding X into xAI in 2025, and both deals drew complaints that he sat on both sides of the table.
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