Key Highlights

  • Tesla slipped 0.87% to $399.81 on October 30, 2026.
  • Elon Musk said a SpaceX and Tesla Merger would be a good idea.
  • Third-quarter Revenue was $28.05 billion, flat from a year earlier.
  • Active Full Self-Driving subscriptions rose 67% to 1.74 million.

What stood out about Tesla (NASDAQ:TSLA) on Friday was how little it moved. On a day when Intel (NASDAQ:INTC) lost 28.58%, AMD (NASDAQ:AMD) fell 10.88% and the Nasdaq Composite dropped 2.86%, Tesla shares slipped just 0.87% to $399.81, closing a fraction below the $400 mark. Volume of 41.67 million shares was almost exactly normal, at 0.98 times the usual level, but with a Market Value of about $1.58 trillion, Tesla routinely ranks among the most actively traded US stocks by dollar value.

The relative calm reflects a stock whose story has drifted away from the semiconductor and cloud spending debate that hammered technology shares this week. Instead, Tesla investors are focused on a possible combination with SpaceX (NASDAQ:SPCX), the ramp of its robotaxi service and the long-term promise of its Optimus humanoid robot.

The SpaceX question

Elon Musk said on SpaceX's third-quarter Earnings Call on October 20 that a merger of SpaceX and Tesla would be a good idea. "Do I think it would be a good idea? Yes," he said, according to market reports, while cautioning that a deal should not be assumed and describing the topic as like "tap dancing through a minefield." Both companies have formed special committees of independent directors to study the idea, and Musk said he cannot take part in their discussions because he is conflicted.

On Friday, Bank of America (NYSE:BAC) published a note saying the most logical structure would be an all-stock Acquisition of Tesla by SpaceX, with Tesla shareholders receiving newly issued SpaceX shares. The bank said a premium for Tesla holders is likely, but stressed that "terms have not been agreed and a transaction is far from certain." It identified China as the main regulatory risk, because Tesla's Shanghai plant, which builds roughly half of Tesla's global vehicle output, would come under the ownership of a major US defense contractor. BofA kept its Buy rating and $460 price target.

Any deal faces a high bar. Approval would require a majority of all outstanding Tesla shares, not just the votes cast, meaning abstentions count against it. Tesla's annual meeting is reportedly set for December 3 with no merger item on the agenda. SpaceX shares, which trade under the ticker SPCX, fell 6.37% on Friday.

Barclays analyst Dan Levy estimated that at recent values one Tesla share would be worth about 0.7 SpaceX shares before any Takeover premium, and that Musk would own about 37% of a combined company while controlling about 56% of the vote. Earlier in the week, merger hopes helped Tesla close up about 4% at $407 on one session, according to market reports.

What Tesla does

Tesla designs and builds electric vehicles, including the Model 3, Model Y and Cybertruck, and sells energy storage systems such as the Megapack. It earns growing revenue from services and from its Full Self-Driving software, operates a robotaxi network in Austin and is developing the Cybercab, a dedicated autonomous vehicle, along with Optimus. The two Musk companies already do Business together: SpaceX has bought $626 million of Tesla Megapacks so far this year, according to market reports.

Recent results

Tesla reported third-quarter results on October 21. Revenue was $28.05 billion, flat from a year earlier and in line with consensus, according to market reports. Adjusted Earnings Per Share of $0.48 beat the $0.45 estimate but were down 4% year over year, while GAAP Net Income fell 43% to $787 million. Gross Margin improved to 19.6% from 18.0% a year earlier, and automotive gross margin excluding regulatory credits rose to 18.1%.

Deliveries of 486,532 vehicles were down 2.1% but above expectations, with Tesla saying battery availability was "the limiting Factor in increasing auto volumes." Operating Income fell 56% to $718 million as Research and Development spending rose 69% to $2.76 billion, driven by AI, Optimus and Cybercab. Free Cash Flow was $1.53 billion, down from $3.99 billion a year earlier, and the company held $45.4 billion in cash and investments.

On autonomy, active Full Self-Driving subscriptions rose 67% to 1.74 million, and the robotaxi fleet logged nearly 2 million cumulative unsupervised miles. The Cybercab joined the unsupervised Austin fleet on September 3, according to market reports. Musk said robotaxi revenue should become "noticeable probably in Q2" of next year, and that Tesla is "almost sold out of all Megapacks for 2027."

Valuation

At $399.81, Tesla trades at about 440 times trailing earnings, by far the richest multiple among the largest US companies. Market Analysis puts its forward multiple at about 133 times, compared with about 5 times for General Motors (NYSE:GM). The stock is down about 10% this year and sits roughly 19% below its 52-week high of $498.83. The valuation rests heavily on autonomy, robotics and energy rather than on car sales.

The bull case

Supporters see a company in transition, with margins recovering, a large cash pile and several businesses close to scale. Robotaxi miles are rising quickly, FSD subscriptions are growing and energy storage Demand is strong. Barclays recently upgraded the stock to Buy from Hold, according to market reports. A SpaceX combination, if it came with a premium, could offer Tesla holders exposure to the rocket and satellite business and simplify the shared Terafab chipmaking project, whose long-term costs Musk expects to exceed $100 billion.

The bear case

Skeptics note that revenue is flat, deliveries are falling and Operating Margin was just 2.6% last quarter. Energy revenue fell 16%, and storage deployments of 13.7 gigawatt-hours missed expectations. Regulatory Credit income has collapsed by 73%. A merger would raise governance questions and could run into Chinese regulators, and while a Seoul court recently rejected a refund claim from Tesla owners over Full Self-Driving, similar disputes in China and possible US lawsuits over its Marketing remain pending. At more than 400 times earnings, the stock leaves little room for disappointment.

Merger Committees and December Meeting

The near-term focus is the work of the two special committees and whether any merger proposal emerges before the December 3 annual meeting. Investors will also track robotaxi expansion beyond Austin, Cybercab production, Optimus deliveries to outside customers expected around the end of next year, and fourth-quarter delivery figures due in early January. With Tesla holding a stake in SpaceX and the two companies increasingly intertwined, SPCX's swings are likely to keep feeding into Tesla's share price.