Tesla Stock Slides Over 8% as Robotaxi Unveiling Postponed: UBS Downgrades to Sell
In a recent report, Bloomberg revealed that Tesla's much-anticipated Robotaxi unveiling has been delayed by two months, leading to a more than 8% drop in Tesla (NASDAQ:) shares. Originally set for August 8, the launch is now rescheduled for October to allow the development teams more time to finalize the prototypes.
Following this news, Tesla stock continued to decline on Friday, with a 1.4% drop after UBS downgraded the stock from Neutral to Sell. UBS analysts highlighted the importance of Tesla's growth initiatives beyond its core Auto business, noting the challenges in valuing the potential future growth opportunities and the impact of market enthusiasm for AI on Tesla's stock.
Despite the recent setbacks, analysts estimate a remaining value of over $500 billion for Tesla's future growth at current levels, with a potential future value of $1 trillion in five years. However, UBS believes that even larger opportunities would be needed to justify a Buy rating for the stock.
Tesla's stock had been on an 11-day rally following a strong second-quarter deliveries report, which had erased the year-to-date losses. However, the recent drop has put the shares back in negative territory for 2024. The company has faced challenges this year, including layoffs and declining sales, attributed to factors such as an aging EV lineup and increased competition in China.
In conclusion, the delay in the Robotaxi unveiling and the subsequent stock drop highlight the uncertainties surrounding Tesla's future growth prospects and the impact of market sentiment on its valuation. Investors should closely monitor developments in Tesla's AI and tech investments, as well as its competition in the EV market, to make informed decisions about their investments in the company.