Tesla's stock dropped 5.5% on Wednesday following a downgrade by Barclays analyst Dan Levy. Levy believes the recent rally in Tesla's stock has ignored near-term concerns about its fundamentals. He argues that the stock's surge can be attributed to the market's AI-driven thematic trade and excitement over the company's decision to open its Supercharger network to other brands. However, Levy suggests that AI is a long-term opportunity for Tesla and not a significant driver of its valuation currently. He also questions the benefits and uncertain outcomes of Tesla's Supercharger deals and highlights that the expansion of the stock's multiple has been the main reason for its recent rally. Levy points out that Tesla's near-term fundamentals have not changed significantly, and there are factors such as overestimated EPS estimates, uncertain margins, and possible future price cuts that may affect the stock.
