Barclays Upgrades Tesla to Overweight With $450 Target as SpaceX Merger Speculation Sends Shares to Three-Month High

Tesla shares surged more than 5% on Monday, touching their highest level in more than three months, after Barclays analyst Dan Levy upgraded the stock to Overweight from Equal Weight and raised his price target to $450 from $370. Levy cited a potential merger with SpaceX as a central pillar of his bull case, alongside what he described as a sharp inflection in Robotaxi execution, FSD adoption exceeding 75% on new North American deliveries, nearly 2 million cumulative unsupervised Robotaxi miles logged with roughly 8x quarter-over-quarter growth, and a Tesla energy business reported to be nearly sold out for 2027. The upgrade helped push Tesla to the top of the Magnificent 7 leaderboard for the day, with the Nasdaq closing at a one-month high partly on the move.

Wedbush analyst Dan Ives assigned 80% to 90% odds of a Tesla and SpaceX merger completing by 2027, projecting the combined entity could value Tesla stock above $500 per share. Ives framed the deal as combining Tesla's robotics and autonomous software stack with SpaceX's AI infrastructure and computing capabilities. Bloomberg reported that both companies have established independent special committees of directors to evaluate a possible combination, and the merger requires Tesla shareholder approval. Barclays noted that Tesla's implied standalone value, excluding any merger premium, sits in the range of roughly $355 to $372, meaning the market is already pricing in a meaningful probability of a deal.

On the SpaceX side, Elon Musk announced the company has closed $40 billion in debt financing to purchase Nvidia GPUs, with chips expected to arrive in the first and second quarters of 2027. Musk said SpaceX's investment-grade credit standing and diversified revenue from Starlink and rocket launches gave it access to debt markets unavailable to most AI infrastructure companies. Bloomberg, however, reported that people familiar with the discussions said pricing negotiations were still ongoing as of October 26, creating some uncertainty about whether the deal is fully finalized. Musk used the announcement as a platform to warn that debt markets have nearly shut off for companies whose revenue comes primarily from AI data centers, predicting more than 200 neocloud firms face what he called "guppy-level death and consolidation." Shares of CoreWeave fell roughly 9.7%, with IREN dropping about 3% and Nebius slipping around 2% in response.

On the regulatory front, Latvia became the 10th European country to approve Tesla's Supervised Full Self-Driving system, extending the technology's footprint across the EU. Tesla also partnered with car-sharing platform Turo to launch what the companies described as an industry-first self-driving rental experience, aimed at broadening FSD adoption. A combined Tesla and SpaceX entity would also consolidate a Bitcoin holding of approximately 30,221 BTC, worth roughly $2.56 billion at current prices, with SpaceX holding an estimated 18,712 coins and Tesla holding 11,509. Tesla's existing Bitcoin position contributed a $288 million pre-tax unrealized gain in the third quarter, representing about 28% of the company's $787 million in GAAP net income for the period.