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 Today. On 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.”

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 potential of TSLA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 Trending AI Stocks on Wall Street and 10 Must-Watch AI Stocks on Wall Street.

Disclosure: None.