Tesla stock (NASDAQ: TSLA) opened Wednesday’s trading session at $381 after plunging nearly 6% on Tuesday. The leading EV manufacturer is on the back foot this year as prices are falling due to a dip in sales worldwide. To make things worse, Reuters reported that Tesla exaggerated its full self-driving safety data to European regulators and is now facing regulatory scrutiny amounting to misleading marketing.

Traffic safety regulators in Sweden and the Netherlands are mounting pressure on Tesla over the report and are scrutinizing the EV maker’s safety norms. The inflated safety data provided by Tesla to European regulators is affecting its stock prospects. All of these issues are troubling TSLA’s prospects and stunting its growth in the charts. However, investment banking firm Baird wrote in a note to clients that Tesla could soon merge with SpaceX, increasing its prospects.

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Tesla Stock Price Target $522 (TSLA)

Baird’s note to clients read that a merger could likely happen ‘sooner’ rather than ‘later’. Analysts from the investment bank also reiterated their Outperform rating with a buy call for Tesla stock. They maintained their price prediction for TSLA at $522, in their most bullish forecast. That’s an uptick and return on investment (ROI) of approximately 37% from its current price of $381. Therefore, an investment of $1,000 could turn into $1,370 if the price prediction turns out to be accurate.

The note also confirmed that Baird continues to buy Tesla stock with the company-specific catalysts ahead. The investment bank is betting big on the Tesla and SpaceX merger and accumulating TSLA for clients. This makes the car maker a must-watch equity, as an uptick is expected by the investment banking firm. If the merger of the two companies occurs, traders can get to hold both worlds. Taking an entry position now could prove beneficial to traders.