Expectations of a merger with SpaceX (SPCX.US) continue to heat up, and the proportion of Wall Street bearish bets on Tesla, Inc. (TSLA.US) hits a new low in more than 11 years.

As the potential merger between Tesla, Inc. (TSLA.US) and SpaceX (SPCX.US) gradually moves closer to reality, Wall Street analysts are rapidly turning bullish on the electric vehicle manufacturer. Data shows that the proportion of analysts giving Tesla, Inc. a sell rating has fallen to the lowest level in more than 11 years, with the market full of expectations for the valuation uplift that a merger of the two companies could bring. Last week, BNP Paribas and CLSA successively withdrew their sell-equivalent ratings on Tesla, Inc., upgrading them to "Neutral" and "Hold," respectively. Barclays PLC Sponsored ADR also joined the bullish camp on Monday, upgrading Tesla, Inc. from a hold-equivalent level to a buy-equivalent level. Driven by market optimism, Tesla, Inc. shares rose 5.2% on Monday. Barclays analyst Dan Levy said in a research note: "The anticipated merger transaction has now become an important part of the bullish thesis for Tesla, Inc., because it provides potential upside for the stock price." Expectations for a merger between Tesla, Inc. and SpaceX have clearly heated up recently. On the evening of last Tuesday, Musk said that the boards of both companies had separately established special committees to study the potential benefits of a transaction. In fact, even before SpaceX's listing in June this year, Wall Street had been closely watching the possibility of a merger between these two core Musk companies. As the two sides formally began assessing the feasibility of a transaction, the market began more actively incorporating the potential merger into Tesla, Inc.'s valuation models. BNP Paribas analyst James Picariello noted that the potential merger transaction has now become the primary factor affecting Tesla, Inc.'s valuation. Although he remains cautious about Tesla, Inc.'s cash burn rate and the progress of its artificial intelligence business, he sharply raised his Tesla, Inc. target price from $266 to $420 given the increased possibility of SpaceX acquiring Tesla, Inc. Picariello stressed that the target price adjustment was based entirely on the increased likelihood of SpaceX acquiring Tesla, Inc., rather than on an improvement in the fundamentals of Tesla, Inc.'s existing business. Zacks Investment Research strategist Andrew Rocco said that if the two companies ultimately decide to proceed with the merger, the independent special committees of both sides would still need to negotiate the terms of the transaction and ensure that it serves the interests of their respective shareholders. He estimated that assuming the acquisition transaction includes a 25% premium, the potential value of Tesla, Inc. shares could reach about $500 per share. Changes in Wall Street analyst ratings also reflect a shift in market sentiment. According to data, among the 60 analysts currently covering Tesla, Inc., only 5 give a sell rating, accounting for about 8.3%, the lowest level since early 2015. By comparison, on January 1 this year, 15 of 71 analysts still gave sell ratings, accounting for about 21.1%. It is worth noting, however, that although the proportion of analysts bearish on Tesla, Inc. has continued to decline this year, the proportion of explicitly bullish analysts has not increased by a comparable margin. This means that some analysts have mainly shifted from a pessimistic stance to a wait-and-see approach, rather than turning fully optimistic. In terms of stock price performance, Tesla, Inc. has still clearly underperformed the broader market this year. As of Monday, Tesla, Inc. shares had fallen about 13% year-to-date, while the S&P 500 index had risen about 12% over the same period. Analysts pointed out that Tesla, Inc. has long set ambitious technology and commercialization goals, but the actual pace of progress on some projects often lags behind previous commitments, making it difficult for investors to judge when its artificial intelligence business will truly substantial profits. Even without considering the potential merger transaction, Tesla, Inc. itself is in an important strategic transformation phase. Musk is trying to push Tesla, Inc. to transform from a traditional electric vehicle manufacturer into a leading company in physical artificial intelligence, focusing on developing Robotaxi autonomous ride-hailing, humanoid Siasun Robot&Automation, and related AI technologies. At the same time, SpaceX is also actively expanding its artificial intelligence business footprint. Earlier this year, SpaceX incorporated Musk's artificial intelligence company xAI into its business system and cooperated with Tesla, Inc. on special engineering projects such as the Terafab chip manufacturing project and the next-generation Roadster sports car. The market believes that if Tesla, Inc. and SpaceX ultimately merge, they are expected to form a technology giant spanning electric vehicles, autonomous driving, Siasun Robot&Automation, aerospace, satellite communications, and artificial intelligence infrastructure. According to relevant estimates, the combined enterprise valuation of the two companies could reach about $3.6 trillion, thereby creating a massive AI industrial group led by Musk. However, whether the potential transaction can ultimately be reached, and how the transaction structure, valuation, and shareholder interests will be coordinated, remain uncertain. On fundamentals, Tesla, Inc. last week reported third-quarter profit that exceeded Wall Street expectations, but the company lowered its full-year 2026 spending forecast, raising doubts among some investors about whether its investment in AI strategy is sufficient, and the stock price performance fluctuated as a result. Nevertheless, Barclays analyst Levy believes that Tesla, Inc.'s latest financial report still released several positive signals, especially progress in the core automotive business and the Robotaxi business, which is expected to support the stock price. As the potential merger transaction becomes a new valuation catalyst, Wall Street's investment logic for Tesla, Inc. is changing. Rather than focusing solely on electric vehicle sales and profit margins, investors are now increasingly focused on the potential synergies between Tesla, Inc. and SpaceX in artificial intelligence, chips, Siasun Robot&Automation, and aerospace technology. Before the transaction is formally completed, whether Tesla, Inc. can deliver on its AI business growth targets and whether the potential merger can truly create value for shareholders will remain key factors determining its long-term stock price performance.