Shares of Tesla surged as much as 4.7% to $389.62 on Monday after Barclays upgraded the stock to Overweight — the equivalent of a "buy" rating — and lifted its price target to $450 from $370, sending the clearest Wall Street signal yet that the bull case is broadening beyond cars. Barclays Says Buy Tesla Before a SpaceX Mega-Merger — But Is a $5 Trillion Bet Built on Solid Ground?
Shares of Tesla jumped 4.7% to $389.62 Monday after Barclays analyst Dan Levy flipped from neutral to bullish, upgrading the stock to Overweight and setting a $450 price target — suggesting 21% upside from Friday's close. The call crystallizes a new Wall Street debate: how much of Tesla's value now hinges on a deal that hasn't happened yet?
• A Potential Mega-Deal Is Now Driving the Stock's Story. Levy wrote that "the recent dialogue around Tesla has skewed heavily to a potential combination" with SpaceX, adding that "with a combination heavily expected, and with expectation for some premium to TSLA stock, we believe this should drive upside."
Barclays views an all-stock SpaceX acquisition of Tesla as the most likely deal structure.
The combined entity could be valued near $5 trillion, with SpaceX currently worth roughly $1.98 trillion and Tesla around $1.5 trillion. For shareholders, the implication is stark: analyst Dan Ives estimated Tesla shares would need to be priced at $500–$550 to win shareholder approval — well above today's price.
• The Core Car Business Is Finally Rebounding — But Barely. Tesla's Q3 revenue came in at $28.05 billion, essentially flat versus a year earlier. Still, Levy noted "the auto business is on track to grow this year after two years of declines, and 2027 should see further upside."
A new 7,000-per-week Model Y output record at Berlin and strong Cybercab activity in Austin underpin that optimism. Flat revenue isn't inspiring on its own, but after consecutive annual declines, any growth inflection changes how investors value the earnings trajectory.
• Robotaxis and Energy Storage Give the Bull Case Legs Beyond M&A. Tesla's cumulative unsupervised robotaxi miles rose eightfold from the prior quarter , and its driver-assistance software now has a subscription rate above 75% among new North American deliveries.
Levy also flagged that Tesla's energy business is "nearly sold out for 2027 given robust demand from data centers," which could support over 50% growth in shipments.
• Shareholder Approval Remains a Real Hurdle. Any deal requires approval from more than 50% of each company's outstanding voting power — a bar Barclays called a "high hurdle" that Musk himself acknowledged.
Analysts have warned of regulatory and geopolitical obstacles, including national security concerns and Chinese regulatory approval. If the merger stalls, today's premium evaporates quickly. With 25 of 49 analysts now at buy, shares still down more than 17% year to date , the stock is pricing in a future Tesla must still deliver.