Tesla stock slips on UBS downgrade, rally on AI was ‘too much’

Shares of Tesla (TSLA) are slipping after UBS downgraded the EV maker to Sell, believing that shares have rallied “too much, too soon” on its AI plans.

Morning Brief Hosts Seana Smith and Brad Smith break down the call amid reports that Tesla plans to push back its robotaxi debut.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Melanie Riehl

Video Transcript

We’re watching shares of Tesla this morning, the stock falling after analysts at U BS downgraded the EV manufacturer.

The firm believes that Tesla shares have risen quote too much, too soon over its A I plans here, shares are down right now as we begin the trading session by about 2.5% over the past five days, you’ve seen slippage of a little more than 6.5%.

And additionally, here have reports about the Robo Taxi Day being potentially pushed back as well here.

Yeah, this is, this is uh a valuation call here from Joseph Bach, the analyst over at U BS and he’s talking about the fact that if market enthusiasm for A I does diminish that this may impact Tesla’s multiple here going forward and he’s making the case that this downgrade is warranted quote, given the lack of visibility and the risk that growth opportunities materialize on a longer term ar rise and, and then he put in parentheses or not at all.

And I think that’s a big question that so many, so many analysts are asking themselves this morning.

There was a lot of excitement surrounding the Robo tax name.

Exactly what that was going to entail what that would look like.

How big of a driver a catalyst was that going to be for the stock when we were initially expecting that to happen just next month.

Now, reports that it has been delayed.

Of course, this calls into question exactly.

A lot of that excitement that we’ve seen in the stock over the last 5 to 6 weeks, whether or not it has certainly got a little bit ahead of itself.

And, and it’s also important to point out that Joseph Sachs Pack isn’t alone in terms of this call.

A number of analysts here had had a bit more of a bearish tune maybe over the last 24 hours when this has been called into question.

Just exactly maybe what that near term could look like here for Tesla.

And we could potentially see a bit more volatility on the back of the massive rise that we’ve seen since the start of June Elon wants to be thought of as an A I company.

He was very clear about that on the most recent call saying and giving credit to Kathy Wood saying that she said it best.

Like really, we should be thought of as an A I or robotics company.

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If you value Tesla as just an auto company, you have to fundamentally just understand uh and ask the wrong question.

The right answer is impossible.

He kind of rambles on but he eventually got to the point where saying Tesla is going to solve autonomy and A I is a huge part of that as well as robotics.