SpaceX doesn't sit still.
On Thursday, Elon Musk's rocket and AI company announced plans to acquire a low-band wireless spectrum portfolio, stoking fears of wireless telecom disruption and sending AT&T and its peers' shares down between 8% and 14%.
After the announcement, Wall Street focused mainly on the telecom impact, with many analysts looking to buy the dip in wireless stocks. SpaceX, the thinking went, still doesn't have as much spectrum -- essentially the pipes which carry wireless data -- as traditional carriers. What's more, SpaceX will take years to build required terrestrial infrastructure to truly compete with existing players. And if SpaceX doesn't build infrastructure, it can buy it or partner with an existing player.
Wall Street, in its mobile telecom myopia, might have missed another implication from the purchase: It brings SpaceX and Tesla closer together.
Investors and analysts have speculated for months about a SpaceX-Tesla merger. Several reasons suggest one could happen. For starters, both companies are investing heavily in AI. SpaceX is working on frontier AI models, chatbots, and AI agents. Tesla is infusing AI into physical objects such as robo-taxis and robots. SpaceX and Tesla are working together on a huge semiconductor fab in Texas. Musk believes that chips are a bottleneck to AI growth. There is also Musk himself. He controls both companies, so why not combine them?
While SpaceX's wireless spectrum portfolio could create a new wireless company, the millions of AI devices Tesla plans to build will need to connect and communicate. SpaceX needs spectrum for that, too.
"The mobile bill is not the most interesting part of this move," wrote Pivotal Research analyst Jeff Wlodarczak in a Monday report. "Our view is that it funds a private mesh for Teslas, Cybercabs, robots and the rest of the device fleet, and every fixed Starlink customer added makes the mesh denser."
He rates SpaceX shares Buy and has a $220 price target for the stock. He doesn't cover Tesla stock.
Tesla stock rose 2% on Friday, after the SpaceX spectrum announcement. Shares were down 0.1% in premarket trading on Monday, while S&P 500 and Dow Jones Industrial Average futures were both up about 0.1%.
SpaceX stock was up 0.5% at $163.41 in early trading on Monday after rising 1.3% on Friday.
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