New York, Jan 31, 2026, 06:53 (ET) — Market closed.
Tesla shares ended Friday up 3.3% at $430.41, after reports that CEO Elon Musk’s SpaceX was in talks to merge with xAI and that a tie-up with Tesla was also being weighed. Traders head into the weekend looking for a firmer read on the deal chatter; a merger could help investors “dramatically,” said Andrew Rocco at Zacks Investment Research. (Reuters)
The timing matters. Tesla has been trying to sell investors on autonomous driving and robotics, even as the electric-vehicle market cools and the stock’s swings get tied to non-car headlines. Tesla said it will invest $2 billion in xAI and that production plans for its Cybercab robotaxi — a self-driving taxi — were on track for this year. (Reuters)
On its earnings call, the company also sketched a record jump in capital spending, or “capex” — money for long-term assets like factories and equipment — to more than $20 billion in 2026. Vaibhav Taneja said most of it would go to production lines for the Cybercab, the Semi truck and the Optimus humanoid robot, plus battery and lithium projects; Musk called 2026 “a very big capex year” in a social media post. Scott Acheychek, chief operating officer at REX Financial, said “the bigger story” was “the business model transition now underway” as Tesla leans harder into autonomy. (Reuters)
Bloomberg News reported that SpaceX had discussed the feasibility of a tie-up with Tesla, as well as an alternative combination with xAI, citing people familiar with the matter. SpaceX and Tesla did not immediately respond to Reuters requests for comment, and Bloomberg’s sources said any deal could draw interest from infrastructure funds and Middle Eastern sovereign investors; Reuters has also reported SpaceX and xAI have been in talks about a merger ahead of a planned public offering. (Reuters)
For Tesla shareholders, the merger talk reopens a familiar argument: keep the story simple, or build a bigger one around Musk’s private-company bets. Either way, the question is who pays, and with what — Tesla stock, cash, or some mix that shifts risk around.
But a SpaceX-Tesla deal would likely be tougher to pull off than a private-to-private merger, and investors could balk at paying a premium for a company that does not report results the way public firms do. “If the valuations are extremely high it will be viewed as dilutive to Tesla shareholders,” said John Streur of Boston Common Asset Management — “dilutive” meaning it could reduce the value of existing shareholders’ stake. Tesla’s forward price-to-earnings ratio — the share price compared with expected profit — is already north of 200, Reuters said, leaving little room for missteps if spending rises faster than revenue. (Reuters)
The stock also carries a running governance backdrop. The Delaware Supreme Court on Friday cut by more than $100 million the legal fees Tesla must pay to shareholder lawyers in a director-pay case, reducing the award to $70.9 million, Reuters reported. (Reuters)
When trading resumes on Monday, investors will watch for any formal statement from Musk, Tesla or SpaceX, and for how analysts frame Tesla’s higher spending and xAI tie-up after a week of headline-driven buying. The week also brings the U.S. Bureau of Labor Statistics employment report for January on Friday, Feb. 6 at 8:30 a.m. ET — a calendar event that can jolt rate expectations and high-valuation growth stocks like Tesla. (Bls)
