A fund manager has publicly argued that Tesla and SpaceX are trading as value stocks, pointing to the potential for a merger between the two companies as a primary catalyst for revaluation.
The assessment comes amid a period of intense scrutiny for Tesla, which has seen its shares fluctuate sharply following recent delivery data and ongoing regulatory probes into its Autopilot system.
The argument for a combined entity suggests that the market is currently undervaluing the synergies between Tesla’s automotive and energy businesses and SpaceX’s aerospace operations.
This perspective contrasts with the broader market sentiment that has led to the launch of new exchange-traded funds specifically designed to exclude Elon Musk’s business interests, offering investors a way to avoid exposure to the conglomerate’s risks.
Tesla’s stock has been volatile in recent weeks, rallying on strong Q2 delivery numbers that beat estimates, only to slide as Wall Street analysts demanded more clarity on future growth and margins. The automaker’s shares have also been influenced by macroeconomic factors, including weak jobs data that lowered the risk of further rate hikes, providing a tailwind for growth stocks.
The potential for a merger remains speculative, but it has gained traction among some investors who see the combined technological and manufacturing capabilities as a unique market position.
This narrative adds another layer to the ongoing debate about Tesla’s valuation, which has been complicated by regulatory pressure from the National Highway Traffic Safety Administration (NHTSA) regarding fatal crashes involving its self-driving technology.
Investors will be watching for any further developments in the regulatory landscape and any official comments from Tesla or SpaceX regarding the merger speculation.
The next Federal Reserve rate decision on July 29 could also impact the broader market sentiment for growth stocks like Tesla.