A SpaceX-Tesla Deal as Soon as December?

While the market is focused on the continued fallout from Nvidia (NVDA) as well as the October Producer Price Index report that by some accounts was softer than expected but still showed persistent inflation pressures, we want to flag something making the rounds as it relates to the Portfolio’s newest position, SpaceX (SPCX).

When SpaceX reported its Q3 2026 results, the earnings call contained several forward-facing nuggets, including the potential to hit $100 billion in annual recurring revenue by the end of this year. The other was Elon Musk saying that yes, SpaceX and Tesla (TSLA) have formed special committees to discuss the idea of merging the two companies. That comment confirmed the suspicions that were running rampant even as SpaceX was nearing its IPO earlier this year.

At the time, the thinking was this could be a 2027 event, but the potential for that timing could be shifting — and by that we mean being pulled forward. Bloomberg is reporting that both sides are “progressing in their merger negotiations, and a deal could be announced as early as December.” The same report concedes the deal could slip into early 2027 and also notes such a deal will face some steep regulatory hurdles given SpaceX’s U.S. defense contracts and around 22% of Tesla’s revenue coming from China.

Why the potential pull-forward? Possibly because following the “Blue Wave” that will change the landscape in Washington, such a deal, which by some accounts would create a single company valued at more than $3.4 trillion and bring Musk’s AI, robotics and related efforts under one roof, would face far greater scrutiny in a Democratic-led Congress. It could also face a tough time passing through China’s merger control authority, something which has been flagged as a hurdle for Marvell’s (MRVL) big to acquire Lumentum (LITE).

While the path to a combined SpaceX-Tesla has multiple merits, the path to a merger is bound to be a volatile one and require several answers. Top among those would be how Tesla will wall off its China business, especially given the current climate. Consider us a bit cynical if you will, but with Tesla’s shareholder meeting scheduled for December 3 and the expiration of nearly 800 million SPCX shares on December 8, a merger announcement would be something that re-focuses investor attention.

When it comes to SPCX shares, our play is multi-faceted and includes the ramp in compute monetization and how that will not only alter SpaceX’s mix of profit generation, but also how it looks to disrupt the cellular communications landscape. While the two companies already collaborate, a combined one would likely mean greater control across the AI value chain, from chip design and planned manufacturing to computing infrastructure, AI software, and its deployment in vehicles and robots, not to mention Starlink connectivity. There would also be ample room to cut duplicative R&D and development costs.

As we move toward the Anthropic IPO and the Thanksgiving holiday, we’ll keep our eyes peeled for more on the SpaceX-Tesla front and continue to evaluate where and when to add to our SPCX position.

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At the time of publication, TheStreet Pro was long LITE, MRVL, NVDA, and SPCX.