On Wednesday, Barclays said it was time to make some profits following Tesla’s recent rally. Analyst Dan Levy downgraded the electric vehicle maker’s stock to balance due to overweight but raised his price target by $40 to $260. However, Levy’s new target implies that the stock will need to drop 5.3% from Tuesday’s close. After seeing some downward pressure following its first-quarter earnings report in April, Tesla is up 80% from that month’s low. By comparison, the S&P 500 is up about 8% over the same period. “We believe the stock’s recent rally can be best explained by the market’s current AI-driven topic trading activity, as well as the excitement over recent announcements about opening the TSLA Supercharger network to other brands,” he said in a note sent to customers Wednesday. “However, while we’re not surprised the stock has engaged in the rally, we believe it’s prudent to move to the sidelines.” Shares are up more than 120% year-to-date, compared with gains of more than 14% and 30% respectively for the tech-heavy S&P 500 and Nasdaq Composite. That marks a turning point after the stock underperformed in 2022, down 65% on the year. TSLA .SPX,.IXIC YTD climbs Tesla against the S&P 500 and Nasdaq Composite Levy says there is still a clear long-term opportunity for shareholders and Tesla remains poised to be a winner among device manufacturers rooted in the context of the transition to electrification. He noted that excitement could increase in late 2024 and 2025 for the lower-cost Model 2. But right now, he said, fundamentals can be overlooked as investors buy into stocks with artificial intelligence exposure amid soaring interest in the technology. And while Levy notes that the company has exposure to AI, especially through self-driving technology, it won’t be as big of a winner as Nvidia. Additionally, Levy said part of the protest could come from a “scarcity of bad news” for Tesla, noting that a May article in a German newspaper described problems with data security. company, and self-driving work was quickly forgotten. He also said that overall sentiment about Tesla has been relatively positive since the article. News like changes to Standard Scoring Model 3 eligibility changes for full tax credits under the Inflation Reduction Act and the hiring of NBCUniversal advertising executive Linda Yaccarino as Director Twitter moderators can also be helpful. Partnerships that allow other automakers to use Tesla’s charging technology, he said, have also been a topic of recent discussion considering the stock’s move. “Our experience with TSLA has made us well aware of the potential for TSLA stock volatility to be driven by a variety of fundamentals,” Levy said. “In fact, we are sometimes willing to be more generous with our target multiples because we believe TSLA is more likely to receive ‘more than a car manufacturer’ treatment by the market, given the support from various groups of the investment community, including retail and motivational investors.” Disclaimer: NBCUniversal is the parent company of CNBC. — Michael Bloom of CNBC contributed to this report.