BUZZ-Wall Street Perspective: With SpaceX achieving astonishing growth through AI, Wall Street is focusing on potential gains from the merger

October 21 - ** SpaceX SPCX.O released its third quarter financial report (link), with performance far exceeding expectations—thanks to robust growth driven by artificial intelligence, revenue more than doubled; meanwhile, CEO Elon Musk expressed support for a potential merger with Tesla TSLA.O, calling it "a good idea"

** In pre-market trading, the share prices of SPCX and TSLA rose by 9.2% and about 2%, respectively

Mergers and Acquisitions Arithmetic Meets the AI Moonshot

** JPMorgan stated that a possible merger structure would be an all-stock deal led by SpaceX, typically granting a 30%-35% premium over Tesla’s current valuation to create a merger of equals, and helping Elon Musk retain majority voting control of the combined company

** RBC (Royal Bank of Canada) (rated "Outperform," target price: $225) pointed out that a merger between SpaceX and Tesla could face valuation and governance hurdles, as Tesla shareholders may demand a premium, but the bank believes deeper integration would generate significant strategic benefits, especially in AI, computing, and semiconductor development

** Morningstar ("Fair Value": $70) stated that a SpaceX-Tesla merger could simplify operations on joint projects, and the likelihood of the deal going through would rise over time, especially if SpaceX maintains its premium valuation

** Bernstein ("Outperform," target price: $248) noted that "outlook is key," citing management’s expectations: by the end of this fiscal year, the annualized revenue run rate will reach at least $100 billion, and by the end of 2027, recurring revenue will be between $500 billion and $1 trillion

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