Tesla's flying Roadster is seen strengthening the case for a SpaceX merger

Tesla (TSLA) gained in early trading on Friday after the company's Roadster event created plenty of buzz about what happens when SpaceX (SPCX) thrusters are added to an electric vehicle. The company's demonstration included a flying barrel roll mid-air and a 0-to-60 mph time of under one second.

Yorkville Ives analyst Dan Ives noted the next-gen Roadster vehicle drove itself through the demonstration, which he thinks is a reminder that the autonomy stack is now the default on every Tesla (TSLA) platform even when the product is built to be driven. He noted that the Roadster will not move the volume or revenue needle, with production likely limited. However, he thinks it helps to restore the brand halo at the top of the market and put a spotlight on the engineering stack a week before the third-quarter earnings print.

"We continue to see Tesla as a physical AI platform with a vehicle business underneath it. The vehicle business is the base; the value is being determined by autonomy, robotaxi, and Optimus, which carry roughly two-thirds of our $500 price target," summed up Ives on the TSLA setup.

The Roadster event was also seen as important because it puts the Tesla (TSLA) and SpaceX (SPCX) relationship on the table in a tangible way, with propulsion, pressure-vessel, and control hardware developed at the rocket company sitting on a Tesla product. "We believe this is a small example of the synergies between Tesla and SpaceX, and we believe there is an 80% chance that Tesla and SpaceX merge by the end of 2027 for a number of strategic AI/data-driven reasons," wrote Ives.

Shares of Tesla (TSLA) were up 3.1% in premarket action.

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