Tesla Rally Stalls As Analysts Move to Sidelines

Following a sharp rally in recent weeks, Tesla (TSLA:US) shares have now retraced after several analysts lowered their recommendation on the electric vehicles (EVs) stock.

Tesla stock soared almost 30% in June amid an artificial intelligence- (AI) fueled rally that propelled tech stocks higher in recent months. Moreover, Tesla’s several key rivals – Ford (F:US), General Motors (GM:US), and Rivian (RIVN:US) – have all accepted to use the company’s Supercharger Network.

“The adoption of the NACS [North American Charging Standard] will enable our existing and future customers to leverage Tesla’s expansive Supercharger network while we continue to build out our Rivian Adventure Network,” Rivian CEO RJ Scaringe said in a statement.

Wedbush analyst Dan Ives called Tesla’s supercharger deals an “AWS moment.”

“The Rivian supercharger news another sign it’s Game, Set, Match for Tesla owning charging domestically in the US with more monetization the key looking ahead. Sum of the parts valuation coming into play for Tesla.”

Given the massive rally in shares of the EV makers, several analysts have lowered their recommendations on Tesla stock. The last one to downgrade Tesla shares is Morgan Stanley’s Adam Jonas, who is regarded as one of the biggest Tesla bulls on the Street.

“I have to be up-front with you all. While the team has defended the Tesla OW rating all year, I did not see this 111% YTD rally coming (the S&P 500 is up 14% YTD, for context). We think it's understandable and are sympathetic to the changes in the market narrative around the name,” the lead analyst said in a downgrade note.

A few days ago, Congressman Mike Garcia disclosed he was selling Tesla shares earlier this month, presumably taking advantage of a robust rally in shares