Episode summary
Deepwater's Gene Munster weighs in on a possible SpaceX and Tesla merger
CNBC Fast Money
· · 7 min · Guests: Gene Munster
Summary
Gene Munster argued that Elon Musk’s comments about a possible Tesla-SpaceX merger are more meaningful than the stock’s muted reaction suggests. He said the key issue is not the rumored buyout price, but whether shareholder approval can be secured, which he called likely if both companies’ special committees move the deal forward. In his view, Musk’s repeated support for the idea and the presence of separate committees make the process feel real, even if Musk is conflicted and not directly involved.
Munster framed the combination as a rare strategic fit: SpaceX is already a vertical AI company spanning chips, models, launch, and orbital data centers, while Tesla would add the terrestrial side through FSD, autonomy, and Optimus. He said that makes the potential merged company “the most unique company in the world.” He also downplayed worries about Musk’s ambitious targets, saying investors should adjust for his style rather than take every number literally.
On capital spending and compute demand, Munster said Musk’s comments were actually positive for the broader AI infrastructure trade, including neo-clouds. He argued that demand for compute remains early, not peaking, and that SpaceX’s own plans reinforce the idea that the bottleneck is still being solved, not saturated.
Key takeaways
- Munster said a Tesla-SpaceX merger looks more likely than the market implies, and shareholder approval could be the deciding factor.
- He argued the merged company would combine SpaceX’s vertical AI stack with Tesla’s physical AI and autonomy ambitions.
- Munster said investors should discount Elon Musk’s headline numbers but still view the capex and compute buildout as impressive.
- He said Musk’s comments were positive for neo-clouds because they reinforce that compute demand is still early, not near exhaustion.
Notable quotes
“I THINK THE BIGGER PICTURE HERE IS THE PROBABILITY THAT THESE TWO COMPANIES COME TOGETHER”
“IF THIS COMBINATION IS ABOUT GETTING SHAREHOLDER APPROVAL, IT'S BASICALLY A SLAM DUNK THERE”
“THEY ARE VERTICAL AI COMPANY. THAT MEANS THEY DO EVERYTHING FROM CHIPS TO THE MODELS TO THE LAUNCH BUSINESS”
“I THINK THIS WILL GET OVERWHELMING SHAREHOLDER APPROVAL”
“MY INITIAL READ WAS HIS COMMENTS WERE POSITIVE FOR THE NEO CLOUDS, AND THAT STILL IS MY READ”
How the episode opens
Welcome back to fast money. Shares of Tesla taking a move higher after elon musk saying on the call that the company and Tesla have formed special committees to discuss a merger. Shares are up percent.
For more, let's bring in Gene Munster, managing partner at deep water asset management. Gene, great to have you. I don't know what you make of this headline and the sort of lackluster move in shares of Tesla on.
I mean, maybe it's because there's an expectation that SpaceX is not going to pay a whole lot for Tesla. What do you make of this whole thing?
Well, they're probably not going to pay a whole lot just given how they paid kind of the last bid on x, I when they brought that into the fold about a year plus ago. But I think the bigger picture here is the probability that these two companies come together. Just inched up.
Elon said two times on the call when he got asked. The question is he thinks this is a good idea. He added there are a lot of merits to the combination, but it requires shareholder approval.
Of course they now have. We learned that they have these two committees, one at SpaceX, one at Tesla, which he's not involved with. So because he's a conflicted party, he is not in those conversations, he said, I'd be very supportive of it, but I'm not in those conversations.
And my point of all this is that if that's what it comes down to, if this combination is about getting shareholder approval, it's basically a slam dunk there, I think are very few, even to your point about like, what's the buyout, the bid going to be for Tesla? At the end of the day, the combined company is pretty unique.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- tesla spacex merger
- elon musk comments
- investor outlook
- deepwater asset management
Companies and tickers mentioned
- TSLA
- Deepwater Asset Management
- Tesla
- SpaceX
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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