Tesla ( TSLA ) and SpaceX ( SPCX ) saw rising stock prices on Friday, following Elon Musk's clear statement regarding who would own this new Terafab chip factory once it is built. Terafab is a project jointly developed by Tesla and SpaceX, aimed at establishing a chip manufacturing plant in Texas.
Elon Musk stated that this factory will be jointly owned by Tesla and SpaceX. Despite the assistance provided by two seasoned semiconductor companies, Intel (INTC) and TSMC (TSM), in the construction of the factory, this remains the case. Musk also mentioned that chip manufacturers can rent space within the factory, but the factory will always remain firmly under the control of these two listed companies he owns.
Investors will notice that Musk's Terafab is not just another ordinary semiconductor manufacturing facility. Instead, Musk aims to build a factory covering an area of 100 million square feet, which will far exceed the scale of other factories. The cost of this project is also high, with an estimated total cost of about $100 billion. However, this amount will not be paid in one lump sum. The initial phase of the project is expected to cost between $10 and $20 billion.
Why does Musk want such a giant chip factory?
Tesla and the CEO of SpaceX have a great deal of interest in artificial intelligence and hope to develop their own chips for this purpose. This is also why he has invested so much in the Terafab project. Despite its large scale, investors will still remember that this factory will serve multiple companies.
Both Tesla and SpaceX rely on artificial intelligence to support their respective businesses. Tesla uses it for the assisted driving functions of its electric vehicles and will also power the company's Optimus Optimus humanoid robots. SpaceX also utilizes artificial intelligence in its tasks and has its own AI department, which will soon be renamed SpaceXSI. This department is responsible for the development of Grok, while Grok serves as an assistant embedded within X. X is a social media platform that Musk acquired on October 27, 2022, for $44 billion; at that time, it was still known as Twitter.
TSLA and SPCX stock price performance today
Tesla's stock price rose by 2.10%, while the stock price of SpaceX increased by 1.33% on Friday. Given the close connection between these two companies, their stock prices usually move in tandem. The stock price of SpaceX was also boosted today by its $8 billion acquisition of wireless spectrum.
What do analysts think of Tesla and the stocks of SpaceX?
Using the TipRanks stock comparison tool, traders can view analysts' opinions on each of Elon Musk's stocks. The consensus rating for both stocks is "moderate buy." However, the upside potential for SPCX stock is greater, at 32.88%, with a target price of $216.21. In contrast, the upside potential for TSLA stock is 5.11%, with a target price of $402.79. (See Elon Musk Stock Comparison)
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