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After a solid run over the past two weeks, shares of Tesla Inc. NASDAQ: TSLA now trade near a three-month high, up more than 30% over that time frame. Much of that excitement has been pinned on the much-talked-about SpaceX Corp NASDAQ: SPCX merger, a deal that may or may not be happening.

However, the market may be missing the bigger picture, at least according to the team at Barclays.

Earlier this week, on Oct. 26, the firm upgraded its rating on Tesla to Overweight, arguing the real upside lies in Tesla’s own businesses, not a potential tie-up with its sister rocket company.

It’s a fair question to put to the bulls. With the shares riding high into the final stretch of the year, is Tesla’s standalone story finally strong enough to carry the stock on its own?

The Standalone Bull Case

Barclays’ Dan Levy makes a straightforward argument: Tesla’s recent earnings showed enough strength in the core business to support the stock regardless of any deal. After two years of falling sales, he sees the car unit returning to growth, helped by rising demand for Tesla’s full self-driving (FSD) and a jump in exports from its Shanghai factory.

The company’s energy business may be the quieter star. Tesla says it’s almost sold out of its grid-scale batteries for 2027, driven largely by power-hungry data centers, and Barclays expects energy shipments to grow more than 50%. CFO Vaibhav Taneja leaned into this part of the business in last week's report, noting that "energy gross margins improved from 20.4% to 33.1%."

Add a robotaxi service that’s starting to scale in Austin and inching toward Waymo’s turf, and the picture is a company with several engines, not just one. It captures the bull dream in a nutshell: Tesla is a technology company that happens to make cars, with autonomy, energy, and robotics as the parts that now matter most. This outlook was enough to justify a fresh $450 price target, implying about 10% upside from current levels.

Strong Signals, Softer Numbers

Tesla's recent earnings results gave the thesis real support, at least operationally. More than 1.7 million customers now pay for FSD, and for the first time, subscriptions make up half of that base, a promising sign that Tesla can squeeze recurring, high-margin revenue out of cars it has already sold. Deliveries stayed above 480,000 for a second straight quarter, the order backlog hit a four-year peak, and auto margins ticked higher.

The financial reacceleration was less convincing, though. Revenue growth was essentially flat year over year, and profits fell. At the same time, operating costs and capital spending climbed, and a chunk of the headline jump in energy margins came from one-off tariff refunds rather than the underlying business.

In short, the operating numbers are improving faster than the earnings, which is encouraging but not yet decisive. Tesla did, at least, end the quarter with more than $45 billion in cash and positive free cash flow, giving it the firepower to keep funding its autonomy and robotics push.

A Rich Price to Live Up To

Which brings us to the catch. Even after a strong quarter, Tesla trades at almost 450 times earnings, a multiple that only makes sense if you believe its newer businesses will become enormous, and soon. The market isn’t paying for today’s car profits; it’s paying for a future of fully scaled autonomous fleets, energy dominance, and robotics that have all yet to arrive.

That leaves little room for slips. Robotaxi economics remain largely unproven, with crucial metrics like revenue per ride and running costs still a mystery. Tesla is pushing into a market where its competitors already have a head start, and regulators are watching closely. The energy and self-driving stories are real, but a frothy price-to-earnings ratio demands they scale fast enough to grow into it.

Is the Merger Even Needed?

So can Tesla’s own story carry the stock on its own? On the evidence, it can, just not with much margin for error. Its car business seems to be turning a corner, the energy arm is booming, and FSD is finally throwing off real recurring revenue.

Barclays’ point stands: there’s a real case here that has nothing to do with SpaceX, and a merger, if it comes, would be a bonus to the outlook rather than its foundation. Nor is that optimism Barclays’ alone. Tesla now carries a MarketBeat consensus rating of Moderate Buy, a sign that the Street is warming to the stock heading into year-end, regardless of how the story unfolds.

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