Musk says SpaceX-Tesla deal would be largest merger ever
The Nasdaq Composite climbed 1.1% Wednesday to close at 26,424.82, according to FRED data. The index was almost all the way back to where it stood before Friday’s selloff. The S&P 500 added 0.6%, and the Dow Jones Industrial Average gained 0.7%, or 360.21 points. The developments involving SpaceX, Anthropic and Nvidia gave investors some confidence to set aside concerns about AI—at least for the moment—that were weighing on stocks as recently as last week.
SpaceX closed up 7.8% after an earnings report revealed $14.6 billion in quarterly revenue and an evening conference call produced further bullish projections. Musk reported that SpaceX was profitable, predicted the company would bring in more than $500 billion in annual recurring revenue by the end of 2027, and said SpaceX might merge with Tesla.
Tesla gained 3.4%, and its shares continued higher in after-hours trading after the automaker reported flat third-quarter revenue but, according to The Wall Street Journal, surprised investors by producing positive free cash flow despite heavy spending on AI and robotics.
Musk said a SpaceX-Tesla combination would be the largest merger ever. Tesla’s market valuation was around $1.5 trillion, while SpaceX was valued at around $2 trillion. Even if shareholders were open to a deal, a combination of that size and scale would draw regulatory scrutiny.
Musk, who serves as chief executive of both companies, said SpaceX and Tesla had formed special committees of independent directors to discuss the idea and that he would not participate. “The special committees have not reached an agreement of the terms of any transaction and there is no guarantee that they will but I do think there is a lot of merit in combining the companies,” Musk said during Tuesday’s SpaceX call.
The Wall Street Journal reported Tuesday afternoon that a draft of Anthropic’s IPO prospectus showed $16.3 billion in revenue during the first half of 2026. “I think that was very positive for the market,” said Thomas Martin, senior portfolio manager at Globalt Investments. “You get the fears and then you get the good data points. That’s really what we’re getting here.”
At Nvidia’s GTC conference in Berlin, Chief Executive Jensen Huang delivered a keynote while navigating a heckler. Huang detailed the Vera Rubin supercomputer systems and said they were already in use at Microsoft’s cloud computing arm. Nvidia ended Wednesday up 2.5%. “The sampling of Vera Rubin is just going incredibly well,” Huang said. “We have now set up a supply chain that can manufacture thousands a week of these systems.”
Chipmakers Advanced Micro Devices, Texas Instruments and chip tester Teradyne posted gains of 3.4%, 2.5% and 2.6%, respectively.
Some doubts remained in the AI sector after last week brought the risks facing some players into focus. Shares of neocloud company CoreWeave slid 0.5% Wednesday and were down almost 30% so far this month amid concerns about the company’s data-center ambitions. South Korean data-center start-up Elice also had a flat debut earlier in the week.
“They all go a long way in helping reassure investors who have been spooked about the AI trade,” said Ross Mayfield, investment strategist at Baird. “Taken together, it paints a slightly rosier picture than investors had been seeing the past few weeks.”
The 10-year Treasury yield rose to 5.145% from 5.116%. Oil prices settled mixed, with optimism about a Middle East oil recovery offset by continued threats against shipping through the Strait of Hormuz and attacks targeting Saudi Arabia. West Texas Intermediate crude fell 0.7% to $97.15 a barrel, while December Brent settled at $108.82 a barrel, up 3 cents from Tuesday’s close.