Tesla Shares Plunge as UBS Downgrades Stock, Warns of Overvaluation on AI Optimism
Tesla shares dropped after UBS Group AG downgraded the stock from neutral to sell, citing concerns that optimism over Tesla's artificial intelligence plans has pushed the stock price up too quickly. UBS analysts said that if enthusiasm for AI declines, it could impact Tesla's valuation. They noted Tesla trades at over 80 times forward estimated earnings. The analysts cut their price target for Tesla from over $1470 to over $190, implying an 18% decline from the previous day's close. Concerns are growing over the valuations of companies tied to AI technology, as seen in the recent sell-off of big tech stocks. Tesla is also facing a subdued outlook for electric vehicle sales.