SpaceX Merger Buzz Drives TSLA After-Hours Surge as Reddit Debates Tesla's Next Chapter

TSLA shares rose 3.7% in after-hours trading after Bloomberg reported that SpaceX is considering a merger with Tesla or xAI, ahead of SpaceX's planned IPO.
Reddit sentiment on r/wallstreetbets was broadly positive, with an average sentiment score of 0.52, as traders debated whether a SpaceX tie-up would give Tesla shareholders indirect access to the rocket company's $1.5 trillion valuation.
Skeptical voices on r/stocks pointed to Elon Musk's history of missed robotaxi deadlines, questioning whether the merger narrative is a distraction from Tesla's core automotive challenges.

Tesla stock

$TSLA jumped 3.7% in after-hours trading Thursday after Bloomberg reported that SpaceX is considering a potential merger with Tesla or xAI, the artificial intelligence firm also owned by Elon Musk. The news, which broke late in the trading day, sent

$TSLA shares higher and ignited a wave of discussion on r/wallstreetbets and r/stocks about what a tie-up between Musk's companies could mean for Tesla shareholders.

The SpaceX Merger Story That Drove the After-Hours Move

The catalyst for the after-hours surge was a Bloomberg report, published Thursday evening, stating that SpaceX — which is preparing for an IPO in June at a valuation around $1.5 trillion — is in talks to combine with Tesla or xAI. The report, which was shared on r/wallstreetbets with 1,295 upvotes and 390 comments, framed the potential deal as a way for Musk to consolidate his empire. One top comment noted that a merger could give existing

$TSLA shareholders indirect exposure to SpaceX's long-term upside, while another post on the same subreddit asked whether the move would strengthen Tesla's ecosystem narrative or dilute its core focus.

The news came on the same day that Benzinga published a bullish analyst note from Wedbush's Dan Ives, who argued that Tesla is entering its "AI era" and projected the company's market cap could reach $3 trillion by year-end. Ives pointed to Tesla's $20 billion in 2026 capital expenditures, a $2 billion investment in xAI, and the expansion of robotaxi services to multiple U.S. states as key drivers of the transformation.

Reddit's Split: Optimism vs. Skepticism

The merger news generated a wide range of reactions on Reddit. On r/wallstreetbets, where

$TSLA was the second-most mentioned ticker of the day with a sentiment score of 0.40, many users saw the potential tie-up as a bullish signal. One post, which racked up 8,763 upvotes, told a story about a user's mother who made a quarter-million dollars on gold and silver while the user lost $50,000 on

$TSLA — a contrast that highlighted the stock's volatility and the difficulty of timing the EV maker's moves.

But on r/stocks, a more skeptical thread titled "Fool me once TSLA..." collected 224 upvotes and 107 comments. The post catalogued Elon Musk's repeated misses on robotaxi predictions — from a 2019 promise of "autonomous robotaxis for Tesla next year" to a January 2026 claim that robotaxi service would be "very, very widespread by the end of this year" — and argued that the stock has become a belief system rather than a sound investment. The thread's author noted that Musk's latest promises about humanoid robots and a million-unit production target for Optimus feel like a repeat of the same pattern.

Same-Day News Context: AI Transformation vs. Brand Value Decline

The merger news landed against a backdrop of mixed same-day headlines for

$TSLA. Earlier in the day, Investing.com published a piece titled "Tesla Finds Its Footing as Q4 Earnings Ease Fears Around the Growth Story," which noted that the company's Q4 report exceeded expectations and showed diversification beyond automotive, with energy revenue jumping 25% and improved gross margins. Analysts maintained bullish ratings with price targets around $500, suggesting 15% upside from the current level near $430.

However, a separate Benzinga report highlighted a stark contrast: Tesla's brand value has fallen 36% to $27.6 billion, marking three straight years of decline, and its U.S. recommendation score dropped from 8.2 to 4.0 out of 10. The company's brand ranking fell to 75th from 36th, now trailing Toyota, Mercedes-Benz, and Volkswagen. Analysts cited CEO Elon Musk's geopolitical involvement and a lack of innovative new models as contributing factors to the decline.

TSLA

$TSLA

The broader market context also mattered: a Microsoft-led pullback on Azure cloud earnings disappointment dragged the NASDAQ down 2.3% and the S&P 500 down 1.3%, but

$TSLA bucked the trend with its after-hours surge, suggesting that the SpaceX merger story was powerful enough to override the broader tech sell-off.

What Reddit Is Watching Next

The key question for r/wallstreetbets traders is whether the SpaceX merger talks will lead to a formal deal that gives

$TSLA shareholders exposure to SpaceX's $1.5 trillion valuation — or whether the story will fizzle as Musk's previous merger and acquisition attempts have. The

$TSLA after-hours move suggests the market is pricing in some probability of a deal, but the skepticism on r/stocks serves as a reminder that Tesla's valuation — at a P/E of 297 — already reflects a lot of optimism about the future.

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