Tesla (TSLA) Stock Slides on New Probe, Downgrade

Tesla (TSLA) stock is retreating 4% today after the federal government announced a new probe of the firm. Additionally, Bank of America downgraded the shares to Neutral from Buy today.

 Another Investigation of Tesla

The federal government’s National Highway Traffic Safety Administration (NHTSA), which has already been conducting multiple probes of Tesla, disclosed today that it had opened a new investigation of Elon Musk’s automaker.

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Specifically, the agency will delve into the firm’s Actually Smart Summon system. According to NHTSA, it received four reports of accidents that occurred while the company’s EVs were in Actually Smart Summon mode. The agency noted that the product enables “a user to remotely move the vehicle to the user or to another designated location, through (the) use of a phone app.”

But NHTSA reported that, during the four accidents,  Tesla’s EVs did not “detect posts or parked vehicles, resulting in a crash.”

Bank of America’s Downgrade

Tesla’s upcoming, positive catalysts are more widely acknowledged than in the past, Bank of America noted. Indeed, the  bank wrote that the current levels of TSLA stock bake in much of the company’s longer-term “potential from core autos, robotaxi, Optimus, and energy generation & storage.”

The bank placed a $490 price target on TSLA stock.

While we acknowledge the potential of TSLA, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey