Barron's: Tesla may not belong in the Magnificent Seven, SpaceX fits better
Barron's columnist Al Root says Tesla no longer fits the Magnificent Seven and proposes SpaceX as a replacement, expecting a merger of the two companies.
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what happened
Barron's columnist Al Root argues that Tesla has long been an outlier in the Magnificent Seven and should be removed from the group. He cites Tesla's operating margin of 2.6% in the third quarter and a forward earnings multiple of about 180, against an average of 22 for the rest of the group. SpaceX, he says, has Starlink, which posts a 45% operating margin and serves more than 13 million customers.
The author also sees a likely merger of Tesla and SpaceX. Elon Musk said in October that both boards were evaluating a combination. In an all-stock scenario, Tesla shareholders would hold roughly 49% of a combined company valued at about $4 trillion. Deutsche Bank analyst Edison Yu does not expect Congress to block such a deal.
why it matters
For investors, two questions matter: whether Tesla's weight in indexes and sector groupings would change if it leaves the Magnificent Seven, and how a SpaceX combination would reshape the valuation of the merged company. The piece is analysis and speculation, and no deal has been confirmed.
market impact
Tesla and SpaceX: a possible merger and a change in the Magnificent Seven group affect how their shares are valued
tags
instruments
on polymarket
sources
- Tesla Isn't a Mag-Y Stock. This Is. — Barrons.com, 8 November 2026 at 17:23 UTC
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