Tesla stock (NASDAQ: TSLA) received a bullish upgrade from Barclays on October 26, 2026, with the investment bank raising its price target to $450 from $370 as a potential merger with SpaceX becomes a central part of its investment thesis.
According to CNBC’s report on Barclays’ Tesla upgrade, analyst Dan Levy raised the stock rating to Overweight from Equal Weight, arguing that a possible deal could provide additional upside for Tesla shareholders. The revised target implies roughly 19% upside from the share price at the time of the report.
The move reflects growing investor attention on the proposed combination of Tesla and SpaceX, alongside improving expectations for Tesla’s automotive, energy storage and robotaxi businesses. However, the merger remains under discussion and is not a completed transaction.
Potential SpaceX Merger Becomes a Key Part of Barclays’ Tesla Forecast
Barclays sees the possibility of SpaceX acquiring Tesla as a significant catalyst for TSLA stock. If a transaction includes a premium for Tesla shareholders, the deal could lift the value investors receive for their shares.
The merger talks gained attention after Elon Musk disclosed that the two companies had established special committees to explore a potential combination. Musk has said there is merit in bringing the businesses together, but the discussions do not guarantee an agreement.
Barclays views an all-stock transaction, with SpaceX acquiring Tesla, as a possible structure. Such a deal would still face substantial hurdles, including approval from both companies’ shareholders. The bank has also highlighted the challenge of securing sufficient voting support.
The proposal would connect Tesla’s electric vehicles, autonomous driving ambitions and energy products with SpaceX’s launch, satellite connectivity and artificial intelligence operations. Yet the financial implications would depend on the transaction terms, valuations and the ability of the combined business to deliver returns on its investments.
Tesla’s recent financial performance remains relevant to that assessment. The company reported third-quarter revenue of $28.05 billion, while net income fell 43% year over year to $787 million.
Automotive Growth, Energy Storage and Robotaxis Support the Bullish Case
Barclays’ upgrade is not based solely on merger speculation. Levy also pointed to the possibility that Tesla’s automotive business could return to growth in 2026, with further gains in 2027 supported by Full Self-Driving adoption and higher exports from its Shanghai factory.
The bank also sees potential in Tesla’s energy storage operations. Barclays said strong demand from data centers has left the business nearly sold out for 2027 and could support shipment growth of more than 50%.
Robotaxi activity is another part of the forecast. Barclays identified a recent acceleration in miles driven by Tesla’s autonomous ride-hailing service after a slower initial rollout following its June 2025 launch. The bank also noted that Full Self-Driving adoption exceeded 75% of newly purchased vehicles in North America during the third quarter, according to the report.
These potential growth drivers come with execution risks. Tesla must demonstrate that its automotive operations can grow sustainably, that energy storage demand translates into profitable shipments and that its autonomous driving services can expand commercially. The possible SpaceX merger adds another variable rather than removing those challenges.
Barclays’ $450 target represents the bank’s view of Tesla’s potential value, not a guaranteed outcome. Investors will need to weigh the prospect of a merger premium against Tesla’s operating performance, the costs of its AI ambitions and the uncertainty surrounding any deal. The proposed combination could become an important catalyst for TSLA stock, but its terms and likelihood remain unresolved.