Barron's flags two under-discussed Tesla risks — up to 10% downside if SpaceX merger hopes fade, plus AI execution risk

In a recent column, Barron's highlighted two risks for Tesla stock that the market discusses less than the usual bull/bear talking points: the downside if hopes for a SpaceX merger fade, and execution risk tied to the pace of Robotaxi AI progress.

The first is the SpaceX merger scenario. Because Elon Musk controls more than 80% of SpaceX's voting power, some investors have speculated about a possible merger with Tesla. But Barron's noted that Tesla's board has a fiduciary duty to act in the interest of all shareholders, not Musk alone — a hurdle before any deal even gets off the ground. Even if pursued, a merger would likely take years and require regulatory approval from governments worldwide, including China. One analyst sees $40 to $50 a share, or roughly 10%, of downside risk to Tesla stock if M&A hopes fade.

The second is AI and Robotaxi execution risk. Tesla stock currently trades at about 173 times expected earnings over the next 12 months — a valuation that bakes in considerable optimism about Robotaxi and other AI technology progressing on schedule. Barron's noted that if that assumption falters, the stock could face pressure to re-rate lower.

For shareholders, both risks help explain why the market is unusually sensitive to Robotaxi and Optimus progress updates and management commentary heading into the July 22 earnings call, four days away — set against recent price-target hikes from BofA and Morningstar, the split highlights just how evenly matched the bull and bear cases currently are.