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Shares of Tesla (TSLA) have hit a speed bump this year, tumbling nearly 22% from their December peak of $498.83 as investor confidence starts to wobble. Until recently, Tesla wasn’t just being seen as an electric vehicle (EV) maker. The company was being priced as a frontrunner in robotics, automation, and physical AI, a narrative that helped fuel its rich valuation and relentless bullish sentiment. But that story is now under pressure. Weak delivery data released earlier this month has snapped the focus back to Tesla’s core EV business, where slowing demand and a lack of tangible progress on its automation ambitions are becoming harder to overlook.
Nevertheless, not everyone on Wall Street is turning bearish yet. UBS Group recently upgraded the stock to “Neutral” from “Sell,” signaling that the recent pullback has made the risk-reward more balanced. The firm believes much of the near-term demand weakness is already reflected in the stock, bringing valuations back to more reasonable levels. While risks still linger, UBS continues to see long-term upside in Tesla’s physical AI vision, including its robotaxi push and Optimus robot. So, keeping all these factors in mind, should investors step in or wait for clearer signs of execution?
