Tesla Stock Rises 1.8% as Musk's Stake Hits 19.9% Amid SpaceX Merger Chatter

Tesla shares rose 1.80% to $407.69 in Monday morning trading, recovering ground after a recent pullback, as the electric vehicle maker continues navigating a complex mix of Elon Musk's expanding ownership stake, ongoing speculation about a possible merger with SpaceX, and lingering questions about its robotaxi and self-driving ambitions.

Musk Increases His Stake

Among the most notable recent developments for the stock has been a significant increase in Musk's personal ownership position. Musk's Tesla stake jumped to 19.9% after he exercised stock options worth $110 billion, a move that further consolidates the CEO's control over the company at a moment when speculation about Tesla's strategic direction has intensified.

SpaceX Merger Speculation Continues

Much of the recent chatter surrounding Tesla has centered on the possibility that the company could eventually combine with Elon Musk's other major venture, following SpaceX's blockbuster public debut earlier this month. For Tesla and SpaceX, chatter is growing that two might become one. SpaceX's stock surge has left Tesla in the dust, and now some investors are talking up a merger. With SpaceX and Tesla now resting at vastly different valuations following SpaceX's record-setting IPO, some analysts have suggested a combination could reshape how investors think about both companies' long-term prospects.

A Notable Voice of Caution on the Merger Talk

Not every analyst views the merger speculation as a clear positive for Tesla shareholders. Jefferies has trimmed its Tesla price target to $375 and flagged a new structural risk for the stock, warning of potential downside risks associated with speculative market expectations, particularly regarding a SpaceX merger.

Cathie Wood Continues Building Her Position

Despite the mixed analyst sentiment, prominent growth investor Cathie Wood has continued adding to her Tesla holdings in recent sessions. Cathie Wood's ARK Invest increased its exposure to Tesla and Snowflake on Thursday, June 18, while continuing to trim its position in Roku, according to the firm's latest daily trading disclosures. A trading notice revealed it added 54,815 shares on Thursday across two funds, with Wood buying $22 million of Tesla and $52 million of Snowflake in the same session.

Operational Improvements Amid Valuation Questions

Beyond the merger speculation and Musk's ownership changes, Tesla's underlying business has shown some signs of operational improvement even as questions persist about whether the stock's valuation is justified. Tesla is experiencing operational gains with vehicle sales up 15% year-on-year, but faces challenges in robotaxi progress and a valuation disconnect.

That improvement followed a stronger-than-expected first-quarter earnings report. Tesla's first-quarter 2026 earnings per share of $0.41 beat forecasts of $0.36, exceeding expectations by nearly 14%, with revenue reaching $22.39 billion, exceeding expectations by roughly half a percent. Automotive gross margins improved to 19.2%, while energy storage margins hit a record 39.5%, and free cash flow totaled $1.4 billion.

Significant Capital Spending Plans Ahead

Tesla's management has signaled an aggressive spending plan for the remainder of the year as the company works to expand beyond its core vehicle business. The company plans over $25 billion in capital expenditures for 2026 to expand factories, AI infrastructure, and launch Robotaxi and Optimus products. Musk has described the humanoid robot program in particularly ambitious terms, calling Optimus "probably the biggest product ever," signaling a long-term strategic shift in how the company frames its growth story to investors.

Regulatory Hurdles for Full Self-Driving in Europe

Tesla's autonomous driving ambitions have also run into specific regulatory pushback overseas in recent days. A Swedish transport authority is recommending a vote against the Europe-wide rollout of Tesla's supervised self-driving software, unless the U.S. EV maker disables its ability to exceed legal speed limits.

Despite that specific regulatory concern, broader adoption data out of Europe has shown growing usage of the technology among existing customers. The Dutch road authority said that 40,000 Teslas in the Netherlands had begun using the carmaker's "Full Self-Driving" driver assistance software and had collectively driven 24 million kilometers using the feature.

A Mixed Year for the Stock So Far

Despite the recent recovery in share price, Tesla's overall performance in 2026 has been characterized by significant volatility and underlying investor uncertainty. It's been a rocky start to 2026 for Tesla. The electric vehicle maker's stock has been declining, and excitement around the business simply hasn't been all that strong of late. Intense competition and shrinking margins highlight just some of the biggest risks with the business right now.

Where Analysts Currently Stand

Despite the company's mixed recent performance, the broader analyst community continues to maintain a generally positive outlook on the stock. According to 47 analysts, the average rating for Tesla stock is "Buy." The 12-month stock price target is $420.55, representing a modest increase from recent trading levels.

A Trademark Filing Hints at Future Product Direction

Beyond its existing vehicle and energy businesses, Tesla has also signaled potential new branding directions tied to its broader technology ambitions. Tesla filed a trademark for "Amazing Abundance" covering AI, humanoid robots, autonomous driving, and automation technologies — a development that traders may watch closely as a possible indicator of upcoming product or marketing initiatives across the company's expanding technology portfolio.

Annual Revenue Decline Despite Recent Quarterly Strength

Despite the positive first-quarter results, Tesla's full-year 2025 performance showed a year-over-year contraction that continues to weigh on the broader narrative surrounding the stock. In 2025, Tesla's revenue was $94.83 billion, a decrease of 2.93% compared to the previous year's $97.69 billion. Earnings were $3.79 billion, a decrease of 46.79% — underscoring why investors continue parsing each subsequent quarterly report closely for signs of a sustained turnaround.

With Tesla's next earnings report scheduled for July 22, investors will be watching closely for updated guidance on the company's progress in robotaxi deployment, Optimus production, and the broader AI infrastructure buildout funded by this year's planned capital expenditures. Given the continued speculation about a potential SpaceX merger and the uncertainty surrounding how that scenario might affect existing shareholders, Tesla's near-term stock performance is likely to remain closely tied not only to its own operational results but also to developments at Musk's other ventures, particularly as SpaceX continues navigating its own volatile first weeks as a newly public company.