Tesla Plus SpaceX Could Become a ‘Must-Have’ Investment, Ross Gerber Says

Tesla Inc. (NASDAQ:TSLA) and Space Exploration Technologies Corp.(NASDAQ:SPCX) remain two of Elon Musk’s most closely watched businesses as investors weigh their different growth opportunities, overlapping technologies and the possibility that the companies could eventually combine.

Ross Gerber, President and CEO of Gerber Kawasaki, said he sees stronger long-term potential in SpaceX than Tesla and believes the two Musk-led companies will eventually merge, creating what he called a “must-have” investment for global investors.

Gerber Flags Tesla’s Autonomy Challenge

Gerber told CNBC on Friday that Tesla still faces the difficult task of proving that its autonomous driving technology can operate safely and profitably at scale.

He pointed to the challenge of running potentially 100,000 autonomous vehicles while maintaining safety standards and praised Waymo’s record.

“We can’t have people dying,” Gerber said. “And I give Waymo a lot of credit. They have not had one fatality in a Waymo yet.”

Gerber said autonomous technology could ultimately reduce fatalities because humans are poor drivers. Despite his criticism of Elon Musk, he remains a Tesla investor and continues to support the company’s electric-vehicle and autonomous-driving ambitions.

However, Gerber called Tesla’s Robotaxi opportunity “unproven and difficult” and questioned whether it would become profitable. He said he would be more bullish on Tesla if the company placed greater emphasis on selling electric vehicles rather than pursuing robots.

Gerber Prefers SpaceX Over Tesla

Gerber disclosed that he owns substantially more SpaceX than Tesla and said he has greater confidence in SpaceX’s businesses and team.

He highlighted SpaceX, Starlink and xAI as major attractions. Gerber argued that xAI represents a critical piece of Tesla’s future because Grok and Tesla’s operating system depend on the business.

“In essence, Tesla doesn’t own its own operating system. It’s owned by SpaceX,” Gerber said, framing the relationship as a problem that the companies eventually need to resolve.

Asked whether investors would be better off owning SpaceX than Tesla, Gerber said, “SpaceX is better to me.”

Gerber Sees Tesla-SpaceX Merger As Inevitable

Gerber put the odds of a Tesla-SpaceX combination at 100%, although he acknowledged that valuation, shareholder interests and legal complications could make a transaction difficult.

“I think it’s 100%. I think it’s just like the stars have to align,” Gerber said.

He said changing valuations could complicate what represents a fair deal for shareholders of either company, while combining two public companies could create significant legal challenges.

Still, Gerber said investors would welcome a single company bringing Tesla, SpaceX and their related businesses together.

“I think investors would love one investment that’s just all of this stuff in one pot, and it becomes a, a must-have in your portfolio as a global investor,” Gerber said.

Gerber added that Tesla brings substantial cash and higher revenue, while he sees considerable future potential in SpaceX’s businesses.

JPMorgan Sees Stronger Case For Tesla-SpaceX Merger

JPMorgan recently said SpaceX’s public debut makes a potential combination with Tesla more financially practical by giving SpaceX highly valued stock it could use for an acquisition.

The analysts said SpaceX’s higher valuation makes a SpaceX-led, all-stock transaction more likely than a traditional merger of equals. JPMorgan also called the combination “strategically coherent,” pointing to shared engineering talent, AI infrastructure, the Terafab chip facility and existing business ties across batteries, vehicles and xAI.

However, the bank said regulatory scrutiny and governance issues could complicate a deal, particularly because SpaceX has government and defense exposure while Tesla maintains a significant manufacturing presence in China.

JPMorgan said investors should watch regulatory approvals, shareholder support and the eventual exchange ratio if the companies pursue a merger.

Price Action: Tesla shares were down 1.66% at $370.11 and SpaceX shares were up 0.89% at $151.07 during premarket trading on Friday, according to Benzinga Pro data.

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