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Investing.com -- UBS upgraded Tesla stock to Neutral from Sell, pointing to a more balanced risk-reward after a sharp pullback in the stock, while keeping its price target unchanged at $352.
Shares in Tesla rose 2.2% after the market open by 09:54 ET.
Analyst Joseph Spak said Tesla’s current levels more evenly balance near-term demand challenges and an elevated investment period against the company’s long-term opportunity in physical AI.
The stock fell more than 21% in 2026, notably underperforming the broader market, hurt by a mix of weakening EV demand, a first-quarter energy shortfall, rising costs and capital spending, and slow progress on its robo-taxi and Optimus programs, Spak noted.
"However, we do expect eventual progress on robo-taxi and Optimus and continue to view TSLA as a leader in physical AI," he added.
Spak said he views Tesla’s stock as driven more by sentiment and momentum than fundamentals, adding that "the stock may continue to exhibit high volatility."
On the core auto business, UBS forecasts 1.6 million deliveries in 2026, roughly flat year-on-year, and sees the figure growing at a 7% compound annual rate to around 2 million by 2030, well below the Wall Street consensus of 3 million.
Spak attributed the more cautious outlook to rising competition from Chinese manufacturers, weaker U.S. EV demand, and a limited vehicle lineup with few new products on the horizon.
The robo-taxi program remains a key variable. Spak acknowledged elevated expectations following Tesla’s indication it would be operating in nine cities by the first half of 2026, but flagged concern over the slow pace of its Austin expansion.
He does not expect meaningful scaling in the near term, though he sees a long-term opportunity for Tesla to offer lower cost-per-mile transportation and position itself among U.S. robotaxi leaders.
For Optimus, the analyst said he believes the humanoid robot program "will take longer than Musk’s stated targets" and may face supply chain challenges given the current reliance on Chinese parts. UBS models roughly 5,000 units in 2027 and 30,000 by 2030, against Elon Musk’s more ambitious projections for high-volume production beginning next year.
