TLDR
- Tesla stock rose 0.8% Monday morning following weekend news about Elon Musk’s cross-company investments and xAI funding activities
- SpaceX invested $2 billion in xAI, while reports suggested xAI was seeking a $200 billion valuation, though Musk called these reports “false”
- Tesla sales dropped 13% in the first half of 2025, with Wall Street estimates cut from 2.1 million to 1.7 million vehicles
- Top investor JR Research upgraded Tesla to Buy, focusing on robotaxi potential over current EV sales performance
- Tesla shares remain down 22% year-to-date but up 30% over the past 12 months
Tesla stock climbed 0.8% in early Monday trading as investors processed weekend news about CEO Elon Musk’s expanding business empire. The electric vehicle maker’s shares reached $316.10 while broader markets declined.
The weekend brought reports about SpaceX investing $2 billion in xAI, Musk’s artificial intelligence company. The Financial Times also reported xAI was seeking a $200 billion valuation in a new funding round.
Musk quickly responded on social media, calling the valuation reports “false” and stating xAI has “plenty of capital.” The SpaceX investment appears linked to xAI’s recent merger with X, Musk’s social media platform.
Cross-Company Investment Concerns
The interconnected investments between Musk’s companies raise governance questions for investors. While such arrangements between related companies aren’t uncommon, they can signal potential red flags.
Tesla’s market value sits near $1 trillion, while SpaceX is valued at $400 billion. The combined X and xAI entity holds a $113 billion valuation, making this group of companies extraordinarily valuable.
SpaceX ranks among the world’s most valuable private companies alongside TikTok owner ByteDance. These companies haven’t struggled to raise capital despite recent noise surrounding Musk.
Rainmaker Securities managing director Greg Martin noted that Musk’s public controversies have “short-term impacts” on valuations. He described an “Elon halo effect” that influences all of Musk’s ventures.
The cross-company investments fuel speculation about potential future mergers. Some investors believe Musk could eventually create a single holding company structure.
Robotaxi Potential Drives Bullish Sentiment
Despite operational challenges, some investors are betting on Tesla’s autonomous vehicle future. Top investor JR Research recently upgraded Tesla to Buy, shifting focus from current EV sales to robotaxi potential.
JR Research argues Tesla’s valuation should be “mainly predicated on its ability to achieve its robotaxi objectives.” The investor believes Tesla’s cost-effective neural network approach will scale better than competitors.
Tesla’s existing EV fleet provides infrastructure advantages over rivals like Alphabet’s Waymo. This could enable faster scaling of robotaxi services with “massive” economies of scale.
If Tesla captures 30% of the robotaxi market, JR Research projects operating income could jump 32% to 53% by 2030. This long-term view makes quarterly delivery misses less important.
The investor noted that “occasionally missing quarterly targets or putting out deliveries decline may no longer hamper the stock that substantially if the robotaxi pivot continues to unfold successfully.”
Tesla faces real challenges in its core business. First-half 2025 sales dropped 13% compared to the previous year, forcing Wall Street to cut estimates from 2.1 million to 1.7 million vehicles.
Santa Clara management professor Jo-Ellen Pozner warned that Musk’s public controversies could hurt Tesla if they anger potential customers. She noted his position “becomes a lot dicier” if public opinion turns against him.
Wall Street analysts remain divided on Tesla’s prospects. The stock carries a Hold consensus rating with 13 Buy recommendations, 13 Holds, and 9 Sells.
The average 12-month price target stands at $293.38, suggesting 6% downside from current levels. Tesla shares are down 22% year-to-date but up 30% over the past 12 months.
Despite recent challenges, Musk remains “revered by his boards and investors,” according to Martin. The CEO has “made so many people so much money” throughout his career.
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