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Investing.com - UBS upgraded Tesla (NASDAQ:TSLA) to Neutral from Sell with a price target of $352.00.
The firm said current levels more evenly balance near-term demand challenges and investment period with the long-term physical AI opportunity. UBS said it thinks Tesla stock trades more on sentiment, narrative and momentum than fundamentals.
Recent concerns over EV demand, a first-quarter 2026 energy shortfall, higher costs, higher capital spending requirements, and slow progress of robo-taxi and Optimus have weighed on the stock, UBS said. The firm said it expects eventual progress on robo-taxi and Optimus and continues to view Tesla as a leader in physical AI.
Using 150 times price-to-earnings ratio, the stock is currently pricing in $2.33 of 2027 earnings per share versus UBS estimate at $2.35 and consensus at $2.47, the firm said. Tesla currently trades at a P/E ratio of 325, and InvestingPro data indicates the stock appears overvalued relative to its Fair Value analysis—placing it among considerations for the Most Overvalued stocks.
UBS said its view is balanced by near-term demand challenges, an elevated investment period, and a lofty valuation with a large long-term physical AI opportunity. The firm said it expects the stock may continue to exhibit high volatility. This aligns with InvestingPro analysis, which notes Tesla’s stock movements are quite volatile—one of 14+ exclusive ProTips available to subscribers alongside comprehensive Pro Research Reports for deeper analysis.
In other recent news, Tesla has seen significant developments in both regulatory and market performance. The Netherlands has become the first European country to approve Tesla’s Full Self-Driving technology for use on highways and city streets, following extensive testing and mapping analysis. This regulatory milestone has been noted by Cantor Fitzgerald, which reiterated its Overweight rating and set a price target of $510.00 for Tesla. In contrast, GLJ Research has maintained a Sell rating on Tesla, citing changes in the options market structure as a factor influencing its $25.28 price target.
Tesla’s market performance has also been notable, with vehicle registrations in Germany surging by over 300% in March, according to data from the German road traffic agency KBA. For the first quarter, registrations increased by 160%, highlighting strong demand in the region. Meanwhile, China’s electric vehicle exports reached a record high, with BYD Co. leading the surge, although Tesla was not specifically mentioned in this context. Additionally, SpaceX, another company led by Elon Musk, is reportedly building a sovereign AI platform, utilizing its control over chips, models, and delivery infrastructure, as detailed by Deepwater Asset Management’s Gene Munster. These developments reflect Tesla’s dynamic position in the global market and regulatory landscape.
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