Wall Street Analysts Flag Overvalued AI Stocks: Palantir and Oracle Face Steep Downside Risks

Palantir Technologies and Oracle, two high-flying AI-related stocks, are facing stark warnings from Wall Street analysts despite their impressive year-to-date gains. Palantir shares have surged 140% in 2024 while Oracle has climbed 73%, as investors bet heavily on their artificial intelligence capabilities. However, analysts see troubling valuations ahead.

Brent Thill of Jefferies maintains a sell rating on Palantir with a $60 price target—67% below current levels—citing concerns about its limited customer base of just 849 clients compared to data analytics competitors serving over 12,000 organizations. The company's ontology-driven software and forward-deployed engineering teams haven't convinced Thill of its premium valuation.

Redburn Atlantic's Alexander Haissl similarly warns of Oracle's 40% downside potential, setting a $175 target against current $290 shares. Both stocks now face a reality check as the market scrutinizes whether their AI capabilities justify stretched valuations.