Deepwater's Gene Munster weighs in on a possible SpaceX and Tesla merger

Well, they're probably not going to pay a whole lot, just given how they paid kind of the last bid on X when they brought that into the fold about a year-plus ago. But I think the bigger picture here is the probability that these two companies come together just inched up. Elon said two times on the call when he got asked, he thinks this is a good idea. He added there are a lot of merits to the combination, but it requires shareholder approval. Of course, we learned that they have these two committees, one at SpaceX, one at Tesla, which he's not involved with. So because he's a conflicted party, he is not in those conversations. He said, 'I'd be very supportive of it, but I'm not in those conversations.' And my point of all this is that if that's what it comes down to, if this combination is about getting shareholder approval, it's basically a slam dunk there. I think there are very few, even to your point about, like, what's the buyout bid going to be for Tesla. At the end of the day, the combined company is pretty unique.

And I just want to quickly frame in why this has merits to it: what SpaceX is doing is they are a vertical AI company. That means they do everything from chips to the models to the launch business, the compute, global orbital data centers. They have a kind of end-to-end. But one big piece they're missing is what's going on on terrestrial. And specifically, when you think about physical AI, that is where Tesla steps in. And so when we think about FSD, you think about autonomy, Optimus. That's the piece that Elon is trying to solve for here. So when you put all this together, I think this will get overwhelming shareholder approval. I think people would really applaud this combination and would really put it on track to be probably one of the most, not one of the most, it would be the most unique company in the world by all measures.

Well, I mean, you have to take it with kind of what we know about Elon and just how to kind of adjust for him, so it doesn't get under my skin because I know how to make an adjustment to that number. And the number was 1.7 at the end of the December or the September quarter, and he's saying ten, which means that, you know, if it's between five and ten, it's still going to be a much bigger number. And what he was basically doing was kind of pre-selling the guidance that came from Brett Johnson, the CFO, minutes later, which was to expect 35 to 40 billion in capex in the December quarter, when the street was at 19 billion. Now, surprisingly, the stock went up on that. I mean, typically we see these companies trading off on that. Why would it go up? And the reason is that I think investors believe that this is well spent, whether it's to get to five gigawatts, whether it's seven, ten, whatever it is. So to answer your question, I just take it with a grain of salt and kind of adjust it. And even with that adjustment, it's still an impressive number relative to what we're seeing from the other hyperscalers.