Tesla (TSLA): UBS Says It’s Still Overvalued—Watch Musk’s Next Comments

Tesla, Inc. (NASDAQ:TSLA) is one of the AI Stocks in the Spotlight TodayOn July 14, UBS reiterated the stock as “Sell,” stating that the stock remains overvalued heading into its second-quarter results.

This is despite expectations that there would be a sector-wide beat on production, and currency gains are offering near-term support for auto stocks.

“We expect 2Q25 results to largely beat expectations on better production and FX.”

Regardless, the firm is cautious despite earnings momentum. “There has been a ~20% re-rating, on average,” since March, UBS noted, warning that “core issues that existed pre-tariff mostly remain.”

Specifically for Tesla, the firm said that there is regulatory risk and policy uncertainty.

“We see real risk to regulatory credit revenue for both TSLA and RIVN as well as demand with removal of EV credits.”

Tesla (TSLA): UBS Says It’s Still Overvalued—Watch Musk’s Next Comments

The firm stated that underlying valuation concerns still exist even though the third quarter “could have a last gasp and pulled forward demand.”

CEO commentary and sentiments may drive near-term volatility.

“We believe TSLA remains fundamentally overvalued, but the price reaction will depend on Musk’s call comments.”

Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.

While we acknowledge the risk and potential of TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSLA and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.