Tesla Inc. experienced a decline after UBS Group AG downgraded the stock, citing concerns that its shares had risen "too much, too soon" due to optimism over its artificial intelligence plans. In premarket trading in New York, Tesla was down 1.6% as of 4:30 a.m. The stock had already dropped 8.4% on Thursday, ending an 11-day winning streak. This came after Tesla postponed its planned robotaxi unveiling to October, giving its teams more time to develop additional prototypes. Tesla remains one of the most expensive stocks in the S&P 500 Index, significantly surpassing other megacap technology stocks. Before the recent slump, its shares had surged 44% amid expectations that Elon Musk could transform the company into an AI powerhouse.

UBS analysts downgraded their rating to sell from neutral, citing a lack of visibility and the risk that growth opportunities may take longer to materialize or may not materialize at all. They noted that Tesla's stock trades at more than 80 times one-year forward estimated earnings. UBS's downgrade reflects growing concerns about the valuations of companies tied to AI technology, as seen in a broader sell-off of Big Tech shares. Tesla is also facing a subdued outlook for electric vehicle sales and earnings. Despite this, investor enthusiasm for Tesla's initiatives has increased recently due to AI excitement, but UBS analysts argue that an even larger opportunity would be necessary to justify a buy rating.