Soaring AI Stocks Predicted to Plunge by Up to 80% as Per Certain Wall Street Analysts
Artificial intelligence (AI) has been a significant focus on Wall Street since late 2022, and three AI stocks are expected to experience a significant drop over the next year. The predicted 71% to 80% decline in stock prices of Palantir Technologies, Upstart Holdings, and CoreWeave can be attributed to several key factors.
### Palantir Technologies
Palantir's recent success has been driven by a significant portion of pre-tax income stemming from interest on its cash reserves, which raises concerns about the company's underlying business strength. Additionally, the use of substantial stock-based compensation to incentivize employees continuously increases the share count, diluting existing shareholders' value.
Competition in AI and big data analytics is intensifying, with both large established firms and agile startups entering the market. This could reduce Palantir’s pricing power and market share over time. Analysts forecast Palantir’s revenue growth will moderate, with revenue expected to rise from about $3.9 billion in 2025 to $11.9 billion by 2030. Earnings per share growth is also projected to normalize, which might temper investor enthusiasm after prior rapid gains.
Furthermore, Palantir’s stock is sensitive to geopolitical events and broader market conditions, contributing to volatility and uncertainty in valuation.
### Upstart Holdings and CoreWeave (Inferred)
While specific details on Upstart Holdings and CoreWeave were not provided, similar tech companies facing large projected declines often share vulnerabilities such as overvaluation from AI hype, competitive saturation and margin pressures, and macro-economic headwinds. Rising interest rates, inflation, and potential economic slowdowns generally weigh on high-growth tech stocks.
### Summary
The predicted steep declines are primarily due to a combination of overreliance on unsustainable income sources, share dilution from stock compensation, competitive threats reducing pricing power, and moderating growth forecasts, alongside broader market uncertainties affecting tech and AI-focused companies. These factors contribute to significant risk that investors are pricing into the stocks of Palantir Technologies, Upstart Holdings, and CoreWeave for the coming year.
Money and finance are key factors influencing the predicted drops in the stock prices of Palantir Technologies, Upstart Holdings, and CoreWeave. Overreliance on unsustainable income sources, share dilution, competitive threats, moderating growth forecasts, and market uncertainties have led to a high level of risk that investors are pricing into these AI stocks, requiring a careful approach for investing technology and artificial-intelligence focused companies over the next year.
