New York, February 1, 2026, 05:54 EST — Market closed
- Tesla shares ended Friday up 3.3%, defying the broader market’s slump.
- The move was sparked by reports of possible deal talks between Elon Musk’s companies.
- Traders will be looking for follow-through on Monday amid a packed week of data, headlined by U.S. jobs figures.
Tesla (TSLA.O) shares climbed 3.3% to finish at $430.41 on Friday, easing off a near 5% spike earlier in the day. The rally came on news that Elon Musk’s SpaceX is negotiating a merger with xAI, and had also considered linking up with Tesla. Tesla announced a $2 billion investment in xAI earlier this week. Andrew Rocco from Zacks Investment Research said such a merger would “dramatically” boost investor returns. (Reuters)
Why it matters now: Investors have increasingly seen Tesla less as a traditional carmaker and more as a bet on software, AI, and autonomous machines. A serious shake-up across Musk’s businesses could rewrite the narrative about who bankrolls computing, where the talent lands, and how much risk Tesla shareholders are actually taking on.
The market is shut for the weekend, leaving the stock stuck in a familiar position — driven by headlines instead of new data. Monday will reveal if Friday’s jump signals a trend or just a brief squeeze fueled by rumors.
Analysts and investors told Reuters that a Tesla-SpaceX merger seems unlikely anytime soon, with SpaceX anticipated to go public later this year. Tesla’s forward price-to-earnings ratio remains above 200—well beyond Meta Platforms, Microsoft, and Alphabet, per LSEG data. John Streur of Boston Common Asset Management cautioned that such a pricey deal might end up “dilutive to Tesla shareholders,” potentially cutting the value of existing shares. (Reuters)
In a separate ruling, the Delaware Supreme Court slashed Tesla’s legal fees in a director pay lawsuit by over $100 million, setting them at $70.9 million—roughly 60% less than what the Delaware Chancery Court had awarded. Under the settlement, directors including chair Robyn Denholm and James Murdoch agreed to return about $277 million in cash and stock options. (Reuters)
The broader market turned sour on Friday. Wall Street’s key indexes slipped as investors digested Donald Trump’s choice of former Fed governor Kevin Warsh to replace Chair Jerome Powell, while also parsing inflation figures and earnings reports. Tesla’s gains, however, provided the S&P 500 with its largest boost from a single stock. (Reuters)
Tesla investors face a clear risk: the deal chatter might never materialize. The stock is already priced for major moves, so any sign that a Musk-empire merger is too complicated or costly could trigger a swift sell-off, particularly if interest rates start to weigh on growth shares.
Monday’s open will reveal whether new comments or filings clarify the ongoing speculation. Traders are also eyeing the U.S. Employment Situation report for January, scheduled for February 6 at 8:30 a.m. ET, as it often shifts interest-rate expectations that influence megacap tech stocks. (Bls)
