Tesla stock rising in spite of UBS downgrade
What risks does UBS see in Tesla's long-term projects?
UBS sees several risks in Tesla's long-term projects, such as the costly investment in artificial intelligence (AI), slow pace of improvement, and long-dated payoff3. The firm also mentions the lack of visibility and potential for growth opportunities to materialize on a longer time horizon or not at all. Additionally, there is a concern that market enthusiasm for AI could diminish, impacting Tesla's valuation.
What new price target did UBS set for Tesla?
What reasons did UBS cite for Tesla's valuation concerns?
UBS cited Tesla's investment in AI as a reason for valuation concerns, stating that while the tech is making progress, the investment is costly, the pace of improvement may slow, and the payoff is long-dated. The analysts believe that the market has historically valued Tesla's core auto business at between $60 and $90 a share, while their SOTP model has a value at $57.