Wall Street tech mogul Dan Ives: SpaceX (SPCX.US) shares have a 20%-25% "political discount"; merger with Tesla (TSLA.US) still possible

According to Zhitong Finance APP, Dan Ives, partner at investment institution Yorkville Ives and renowned technology analyst, believes that as Musk’s plans to build artificial intelligence (AI) data centers in Texas face an increasingly challenging political environment, the current stock price of SpaceX (SPCX.US) is subject to a “political discount” of 20% to 25%. Meanwhile, Dan Ives still expects SpaceX to merge with Tesla (TSLA.US), but believes this transaction will encounter more obstacles.

In the midterm elections, Democrats either won or held onto the governorships in key data center states such as Texas, Georgia, Pennsylvania, and Ohio. Among them, Texas gubernatorial winner Gina Hinojosa advocated for stricter restrictions on data center development during her campaign. According to data from Wells Fargo, 27% of the planned gigawatt capacity for data centers under construction is located in Texas.

In fact, even before this midterm election, relevant restrictions had already started to tighten. In September, Texas Governor Greg Abbott ordered a pause on data center project permit approvals, pending a review of power and water resource demands.

In an interview, Dan Ives stated that the midterm election results made SpaceX’s expansion plans even more difficult, especially in Texas, as SpaceX plans to build numerous data centers in the state. He said, “I believe SpaceX is currently trading at about a 20% to 25% discount, and to some extent, this is essentially a political discount that’s beginning to materialize.”

Dan Ives added that Musk cannot simply shift these expansion plans to Florida and expects the billionaire to negotiate with Texas officials. He said, “He will sit down at the negotiating table. I do believe both sides will engage in talks.”

Gina Hinojosa has called for a pause in data center development until stronger protections for local residents are in place. At the same time, she said she is willing to cooperate with Musk’s companies under terms set by her administration. This statement demonstrates that there is indeed room for negotiations between Musk and Texas authorities.

Meanwhile, SpaceX is applying for tax incentives for its $24 billion power plant and supercomputing facility at Starbase City, with a related hearing scheduled for December 9. Investors may get a glimpse of the Texas state government’s attitude toward SpaceX’s expansion plans from the outcome of the hearing.

It’s worth noting that when asked whether orbital data centers could help SpaceX overcome restrictions facing terrestrial construction, Dan Ives said this concept would still take years to realize. For now, the company needs to push ahead with construction in Texas. He stated, “This will take many more years. I mean, in the long term, I have no doubt about this direction. But in the near term, the key remains expanding in Texas.”

Additionally, Dan Ives still believes SpaceX will merge with Tesla. Both companies have set up special committees to study potential merger arrangements. However, SpaceX has cautioned that the deal may ultimately never happen. To close the deal, approvals from relevant committees, boards, and shareholders would be required. Musk has publicly expressed his support for the concept but, due to conflicts of interest, will not participate in committee discussions relating to the matter.

Although Tesla and SpaceX used to be regarded as fundamentally independent businesses, as Musk continues to expand in fields like artificial intelligence (AI), robotics, advanced manufacturing, satellite communications, and computing infrastructure—including terrestrial data centers and potentially future orbital data centers—the business boundaries between the two companies have gradually blurred. SpaceX and Tesla already share AI ambitions through the Terafab chip manufacturing project advancing in Texas.

Regarding Tesla, Dan Ives supports the company's shift toward Cybercab production and refers to the Cybertruck as a niche product. He believes autonomous driving and robotics will represent Tesla’s future, though he expects the transformation will not be entirely smooth. He said, “Tesla’s future lies in robotics, autonomous driving, and Cybercab.”