2 Hot Artificial Intelligence (AI) Stocks to Dump Now – Wall Street Predicts 47% to 62% Nosedives Ahead

AI stocks are flashing red—and analysts say the party’s over for these two former darlings.

Brace for impact: The so-called 'smart money' sees brutal corrections looming. One could shed nearly half its value; the other might get halved like a bad Bitcoin trade.

Remember when these were the golden children of the AI boom? Now they’re looking more like over-leveraged DeFi projects—all hype, shaky fundamentals.

Funny how Wall Street suddenly cares about valuations after pumping these names for years. Maybe they’re just making room for their next bag to hold.

Image source: Getty Images.

Palantir Technologies: 62% implied downside

Palantir develops analytics software for commercial and government customers. Its Core platforms (Foundry and Gotham) help organizations manage and make sense of complex data. The company also develops an artificial intelligence platform called AIP, which lets clients apply large language models to analytics workflows and build generative AI applications.

Importantly, Palantir has distinguished itself with an ontology-based software architecture. An ontology is a framework that links digital information to real-world assets to facilitate better decision-making. The software also captures operational outcomes and feeds that information back to the ontology, creating a feedback loop that produces deeper insights over time.

Mark Giarelli atexplains, "The CORE ontology function and value proposition is that Palantir not only organizes and displays data, but it also creates prioritized, ranked data that can be quickly understood and interacted with, ultimately automating real-world efficiency gains." He expects Palantir's addressable market to reach $1.4 trillion by 2033.

Jefferies analyst Brent Thill acknowledges Palantir is successfully executing on a massive opportunity. "I think the company is incredibly well run. It's a fundamentally sound story. But the valuation doesn't make any sense," he told Barron's when the stock traded under $100 per share in May. The stock now trades at $158 per share, so it stands to reason that Thill thinks the valuation is even more outrageous today.

Indeed, Palantir currently trades at 126 times sales, making it the most expensive stock in theby a long shot. The next most richly valued company isat 31 times sales. That means Palantir's share price could fall 75% and it WOULD still be the most expensive stock in the S&P 500.

The market is enamored with Palantir for good reason. Some analysts even think its data analytics tools could become as foundational as's CRM software. But the current valuation is a clear source of downside risk. I think the stock could drop 60%+ if future growth fails to meet expectations, so shareholders should keep their positions very small.

CoreWeave: 47% implied downside

CoreWeave provides cloud infrastructure and software services. Its platform (called a GPU cloud) is purpose-built for artificial intelligence and other demanding workloads. Research company SemiAnalysis recently ranked CoreWeave as the best GPU cloud on the market, awarding it higher scores than peers like,, and's Google.

CoreWeave reported impressive first-quarter financial results. Revenue increased 420% to $981 million and adjusted operating income (which excludes stock-based compensation and interest payments) increased 550% to $162 million. However, the company reported a non-GAAP net loss of $150 million (up from $24 million last year) as interest payments on its $8.7 billion in debt cut deeply into profitability.

Morgan Stanley analyst Keith Weiss said CoreWeave's strong financial results and ability to win major clients like OpenAI validate its leadership position in what could be a $360 billion market by 2028. However, he also expressed concern about the recent acceleration in its AI infrastructure buildout, which will increase cash burn through higher interest payments and capital expenditures in the NEAR term.

CoreWeave's initial public offering (IPO) took place in March, so the company has only been public for four months. Limited historical data, coupled with heavy AI infrastructure spending, make it difficult to guess how profitable CoreWeave will be. That makes it very challenging to value the stock today, which explains the wide range of target prices among Wall Street analysts: $32 per share at the low end to $185 per share at the high end.

The stock currently trades at 21 times sales. That look expensive when only six stocks in the S&P 500 have higher valuations. But CoreWeave's sales are expected to increase at 129% annually through 2026, which makes the multiple more tolerable. I doubt shares will drop 47%, but it would be prudent to keep positions in this stock very small until the company is closer to profitability.