The stock of electric vehicle maker Tesla ended its impressive streak of 11 straight days with gains on Thursday. The day after, the stock received a downgrade from UBS Group AG, who now attached a “Sell” rating to it.
During the recent rally, Tesla’s shares jumped 33% and reached $271 per share at one moment, marking their highest point since September. However, news that the previously planned unveiling of the company’s highly anticipated robotaxi was pushed back to October caused the stock to lose more than 12% of its value.
Now, UBS analysts are advising their clients that it is time to sell their Tesla holdings. According to a note sent on Friday, the company’s shares have taken off “too much, too soon” thanks to its perceived artificial intelligence potential, which isn’t guaranteed to come to fruition.
“If market enthusiasm for AI diminishes, this may impact Tesla’s multiple,” said UBS in the note.
Tesla’s stock slightly recovered after the initial plunge and closed at $248.23 per share on Friday. This is still a lot higher than UBS’s price target. The investment bank’s analysts have adjusted their price target on the stock from $197 to $147 per share after downgrading it from “Neutral” to “Sell”.