TECH - Tesla Downgraded To 'Sell' By UBS Over Concerns That Stock Has Rallied 'Too Much Too Soon' On AI Enthusiasm | Benzinga
Tesla Inc. (NASDAQ:TSLA) has been downgraded by UBS Group AG due to concerns over the company’s artificial intelligence plans. The stock was downgraded to “sell” from “neutral.”
What Happened: UBS analysts, including Joseph Spak, expressed apprehension that Tesla’s shares have surged too rapidly on the back of AI optimism. A potential decline in AI enthusiasm could impact Tesla’s valuation, Bloomberg reported on Friday.
The analysts cited the lack of visibility and the risk that growth opportunities may not materialize in the near future. They also pointed out that Tesla’s stock is currently trading at over 80 times the one-year forward earnings estimate.
"One would need to see an even larger opportunity to justify a buy rating," the UBS analysts wrote.
This downgrade comes at a time when Tesla is also facing a subdued outlook on electric cars, with declining sales and profit.
Before the 8.4% drop on Thursday, Tesla’s shares had ...