Baird left its Outperform rating on Tesla Inc. intact and maintained a $522 price target, with analyst Ben Kallo presenting updated delivery estimates and addressing the widely discussed prospect of a merger between Tesla and SpaceX following SpaceX's recent initial public offering.
SpaceX completed its IPO on Friday, June 12, raising roughly $86 billion by selling 638.9 million shares at $135 apiece. Since the offering the stock has climbed about 15% while the S&P 500 was essentially unchanged, lifting SpaceX's market capitalization to $2.4 trillion. Taken together, Elon Musk's two largest businesses now account for about $3.9 trillion in equity value.
On the potential corporate combination front, Baird projects a merger between Tesla and SpaceX is likely to take place within 12 to 18 months. The firm expects an initial waiting interval as SpaceX absorbs its recent xAI merger and settles into life as a public company. Kallo noted that recent remarks by Elon Musk, along with the rapid operational tempo typical of both organizations, point to the possibility that preparatory steps toward a merger could begin relatively soon.
The analyst outlined several factors that, in Baird's view, make a merger plausible. Those reasons include Musk's own statements indicating the companies are likely to combine, the necessity of multiple board approvals for large intercompany transactions, overlapping engineering talent, and the potential for deeper vertical integration around inputs such as raw materials and compute resources. Baird also highlighted conventional operational synergies as a supporting rationale.
Regarding regulatory considerations, Baird does not anticipate substantial scrutiny of a Tesla-SpaceX transaction given the firms' limited end-market overlap.
Turning to Tesla-specific items, Baird flagged a slate of upcoming catalysts for the automaker. These include the unveiling of Tesla's next-generation vehicle and the commencement of production for its Optimus humanoid robot, increased adoption of Full Self-Driving technology by European Union regulators, expansion of Tesla's robotaxi operations into additional U.S. markets, the rollout of the Tesla Semi, and the introduction of new offerings from Tesla's Energy business.
On near-term delivery metrics, Baird expects Tesla to report second-quarter deliveries on Thursday, July 2, before the market opens. The firm's Q2 delivery estimate is 392,900 vehicles, compared with a consensus figure of 401,100. For the full year 2026, Baird projects 1.68 million deliveries, slightly above the consensus forecast of 1.66 million.
Context and implications
Baird's view ties together capital markets developments at SpaceX with operational and product milestones at Tesla. The firm’s timeline for a merger reflects both a near-term integration period for SpaceX and the procedural requirements associated with large intercompany arrangements. The firm’s delivery forecasts and product catalysts underscore the key operational events Baird will likely monitor when reassessing its Tesla thesis.