Tesla shares rose 5% amid hopes that Musk will consolidate his tech companies
Tesla's stock rose during trading on Friday, following reports that SpaceX is considering a merger with XAI, boosting investors' hopes for a possible unification of billionaire Elon Musk's tech companies.The stock rose 4.94% to $437.14 at 8:53 PM Mecca time, but is on track to record a weekly loss of more than 2%.The positive performance came after Reuters reported yesterday that SpaceX is in merger talks with AI startup XAI, ahead of its planned public offering this year.Despite the existing interdependence between Musk's subsidiaries, Tesla investors have long called for more consolidation, hoping to increase the world's richest man's focus on different activities
What’s happening:-
Shares of Tesla rose during Wednesday’s extended trading session, after the company reported its fourth-quarter results.
What happened:-
The EV maker reported the first annual revenue contraction in its history for 2025.
Tesla also announced plans to invest around $2 billion in CEO Elon Musk’s AI startup, xAI, as part of its pivot towards AI and robotics.
Tesla stock rises
How were the results:-
The Austin, Texas-based company’s 2025 revenues declined around 3% to $94.83 billion, representing its first annual contraction since going public.
For the fourth quarter, sales came in at $24.9 billion, marginally beating consensus estimates of $24.78 billion.
Earnings were 50 cents per share for the quarter, topping Wall Street expectations of 45 cents per share.
Why it matters:-
Tesla’s core business of electric vehicles, which accounts for much of the company’s current sales, has been under pressure as its rivals continue to unveil newer models at lower prices. Sales were also impacted by the end of federal incentives for EVs.
The company said it is on schedule for the large-scale production of Tesla Semi and CyberCab in North America in the first half of 2026. The company is also looking to launch the Gen 3 version of Optimus during the first quarter of the year.
Tesla also announced plans to stop the sale of its Model S sedans and Model X SUVs, which once helped the company become a leader in the EV segment. With sales of these vehicles declining, the company is looking to use the factory space to build robots.
Tesla stock
The company plans to invest $20 billion in AI and robotics. It has agreed to invest $2 billion to acquire shares in CEO Elon Musk’s startup, xAI.
“2025 marked a critical year for Tesla as we further expanded our mission and continued our transition from a hardware-centric business to a physical AI company,” the company said in a statement.
Tesla
How shares responded:-
Tesla’s shares gained 2.2% to $439.74 in after-hours trading on Wednesday following the release of quarterly results. The stock has surged around 32% over the past six months.
What to watch:-
Investors will continue monitoring plans to ramp volumes of Tesla Semi and CyberCab and the launch of the Gen 3 version of Optimus.