During the earnings call, Musk responded positively to the possibility of a merger between Tesla and SpaceX, stating that the cooperation between the two parties is deepening and "the overlap is increasing," prompting analysts to raise the probability of a merger to 90%. On a business level, both parties are accelerating the integration of projects such as Grok AI, Optimus, and the Starlink satellite network.

Written by: Zhang Yaqi, Wall Street Insights

The latest earnings call from Tesla not only brought performance data but unexpectedly served as a catalyst for the market to reassess the potential merger prospects with SpaceX.

In the earnings call on Wednesday, Musk addressed the merger issue, stating that the collaboration between the two companies is continuously deepening, "the overlap is increasing." Deepwater Asset Management analyst Gene Munster then raised the expected probability of a merger between Tesla and SpaceX from 80% to 90%, predicting that the merger would occur in the coming years.

At the same time, Tesla's revenue for the second quarter exceeded expectations, but earnings per share fell short of projections, with the stock price dropping more than 5% in after-hours trading, leading to a cautious market reaction.

Musk Responds Directly to Merger Issue for the First Time

Previously, market discussions regarding the merger between Tesla and SpaceX mostly remained speculative, as Musk rarely addressed it in public. In this earnings call, Musk was directly asked whether the merger makes strategic sense, and he did not evade the question but elaborated on the expanding cooperation.

"As you can see from SpaceX's numerous collaborations in various fields, the overlaps are increasing, especially with the Terafab project, which will be a truly large-scale project," Musk stated. He also emphasized that the earnings call is not the appropriate venue to discuss potential transactions, and any advancement "must go through the proper process," referring related matters to Tesla's legal team.

Gene Munster posted on the X platform that he was surprised by Tesla's management's willingness to respond directly to this issue, which prompted him to raise his probability assessment. "Before entering the call, I believed the probability of a merger in the next few years was 80%, and now I have raised that assessment to 90%," he wrote.

Integration of Business Operations is Accelerating

Musk detailed multiple specific directions of collaboration during the call, indicating that the integration process has exceeded previous expectations from the outside.

According to Musk, the current collaboration covers multiple levels: Grok AI has been integrated into Tesla vehicles; the digital Optimus robot project is advancing; and Starlink satellite internet will provide connectivity support for Cybercab and future Tesla models to address coverage issues for Robotaxis in areas with weak cellular signals.

"We cannot let Robotaxis get stuck in these cellular signal blind spots, the 'Bermuda Triangle'," Musk said. The satellite connectivity solution is seen as a key infrastructure guarantee for the commercialization of its autonomous ride-hailing network.

Revenue Exceeds Expectations, Earnings Per Share Fall Short

Despite the widespread attention to the merger topic, Tesla's quarterly performance showed a mixed bag.

Tesla's revenue for the second quarter was $28.24 billion, exceeding Wall Street's expectations of $25.71 billion; the company delivered 480,126 vehicles in the second quarter, a 25% year-on-year increase, setting a record high. However, earnings per share were only 33 cents, significantly lower than the analysts' expectations of 50 cents.

Falling short of earnings expectations put considerable pressure on the stock price. Tesla's stock fell 1.30% on Wednesday and dropped an additional 4.13% in after-hours trading following the earnings report. Benzinga's rating data shows that Tesla's momentum score is in the 36th percentile, while the growth score is in the 88th percentile.