Tesla vs. BYD: One Stock Could Be Poised for a Bigger Comeback

Tesla (TSLA) closed above $400 on October 27, 2026, for the first time since July, driven by merger speculation with SpaceX (SPCX). TSLA rose 4.04% to $407.46, with a market value of $1.61 trillion. No merger agreement has been filed, but both companies have formed special committees. SpaceX's market value is $2.02 trillion, and it reported higher profits than Tesla. Analysts note Tesla's valuation assumes a merger, but its operating profit is shrinking.

Tesla reported $1.53 billion in free cash flow for Q3, a 62% decrease year-over-year, driven by lower capex. Operating income fell 56% to $718 million. Tesla reduced its annual capex outlook to $20 billion but spent $13.01 billion in the first nine months of 2026. The company secured $30 billion in additional borrowing capacity.

Tesla (TSLA) reported $4.73B in Q3 capex, up from $2.25B a year earlier but below Wall Street's $7.5B estimate. The company reduced its full-year capex forecast to ~$20B. Investments include AI infrastructure, Cybercab manufacturing, Optimus robot production, energy storage, and semiconductor manufacturing. Tesla's Q3 revenue was $28.1B with net income down 43% to $787M, but free cash flow was $1.53B. The company has $45.4B in cash and investments.

KB Asset Management's RISE ETF, listed July 14, allocates 25% each to SpaceX and Tesla, with the rest in short-term U.S. Treasuries. SpaceX reported Q3 revenue of $14.6B, net income of $4.4B, its first quarterly profit. Elon Musk mentioned potential merger talks between Tesla and SpaceX. The ETF, with $25.8M in assets, offers retirement investors exposure to growth stocks and bonds.

Anthropic (ANTH.PVT), a public benefit company with seven founders, is set for a large 2026 IPO. Its structure contrasts with SpaceX (SPCX), which highlights Elon Musk's control. Anthropic's first-half 2026 revenue surged to $16.3B, with an $80.7B net loss. It aims for a $1.5T-$2T valuation and plans to list on Nasdaq as ANT.

Fort Bend County, Texas, approved tax incentives to attract Tesla's $10B solar plant, Project Crystal Sun, which could create 9,700 jobs. Tesla must invest $10B, hire 9,712 workers, and start construction by June 2025. The deal includes tax abatements and a free trade zone. Tesla has not confirmed a timeline, but the county hopes for a decision soon.