Although the addressable market for AI is enormous, not everyone is sold on the success of a pair of market-leading businesses.
For the better part of the last two years, no trend has captivated the attention of professional and everyday investors more than the rise of artificial intelligence (AI).
With AI, software and systems are given the ability to make decisions, reason, and evolve, all without the aid of human intervention. Although this technology is still in its very early stages of evolution, it offers utility in most industries around the globe and, according to the analysts at PwC in Sizing the Prize, can boost worldwide gross domestic product by 26% come 2030.
The eye-popping addressable market presented by AI hasn’t been lost on Wall Street or analysts. Most financial institutions expect market-leading AI stocks to push higher — but there are exceptions.
Based on the low-water price targets provided by a pair of Wall Street analysts, two of the hottest artificial intelligence stocks on the planet can plunge by up to 94%!
Palantir Technologies: Implied downside of 61%
The first AI stock that could fall off the proverbial cliff, based on the prognostication of a lone Wall Street analyst, is data-mining specialist Palantir Technologies (PLTR 9.79%). Shares of Palantir have catapulted higher by more than 1,500% since 2023 began.
Despite this incredible outperformance, RBC Capital analyst Rishi Jaluria believes Palantir stock is headed to $40, which would represent a decline of 61% from where shares closed on Feb. 4. Interestingly enough, Jaluria raised his firms’ price target to $40 on Feb. 4 from just $11 per share following the release of Palantir’s fourth-quarter results and 2025 sales guidance (both of which blew past consensus estimates).
Jaluria’s continued pessimism for Palantir has to do with “concerns about the runway for growth and product differentiation,” as well as “shares trading at a premium multiple,” per his note to investors.
