'The world's super company': Wall Street weighs SpaceX earnings, company's likely Tesla tie-up

Elon Musk's vision for SpaceX ( SPCX ) has Wall Street sizing up a potential giant unlike anything it's seen before. Mix in a possible tie-up with Musk's EV giant Tesla ( TSLA ), and investors could be looking at a monster play.

Wall Street strategists are already looking at SpaceX and Tesla as one.

Musk, who is CEO of both companies, projects SpaceX's annual recurring revenue by the end of 2027 to fall "somewhere between $500 billion and $1 trillion." Its booming AI compute business is fueling bets that SpaceX could emerge as a fifth hyperscaler alongside Meta ( META ), Alphabet ( GOOG , GOOGL ), Microsoft ( MSFT ), and Amazon ( AMZN ).

"Couple that with the fact that they have a satellite business that's growing, they have a lucrative space business that the AI profits can continue to underwrite, and now we have a possible merger with Tesla," Futurum Group CEO Daniel Newman told Yahoo Finance after the space company posted better-than-expected quarterly results.

"This doesn't only become the fifth hyperscaler, this becomes the world's super company," he added.

A deal with Tesla would bring SpaceX into the EV maker's plans to roll out Optimus robots, its Cybercab business, and ultimately Terafab, Musk's ambitious plan to manufacture chips and reduce production costs by up to 90%.

"This is their way of bypassing Nvidia and bypassing TSMC," RBC Capital Markets lead equity analyst Tom Narayan told Yahoo Finance. "If they can do that, it's huge."

Those chips would power everything from data centers to hundreds of thousands of humanoid robots. Tesla plans to produce 20,000 Optimus per week by the end of 2027.

Canaccord Genuity Capital Markets analyst George Gianarikas raised his price target on Tesla to $442.00 from $410 following the EV maker's quarterly results, with the call based fundamentally on a merger.

"If they merge, you are buying the future of the physical world," wrote Gianarikas on Thursday. "A company that is attempting to make, not just program, Tomorrowland. You are buying the Berkshire Hathaway of tomorrow's physical technology."

Meanwhile, JPMorgan analyst Doug Anmuth more than doubled his price target on SpaceX to $500 after the company posted better-than-expected quarterly results last week. On Friday, shares were trading at $146.

SpaceX has grown well beyond rockets and satellites with plans to become a leading mobile carrier and build out data centers in space.

"SpaceX's ambitions are bigger than any company's we've seen — to make life multi-planetary, leverage the Sun to build out AI in space, & build bases on the Moon and cities on other planets, " wrote Anmuth.