2 Game-Changing AI Stocks That Can Plunge 48% and 54%, According to Select Wall Street Analysts
Key Points
AI has been the stock market’s leading catalyst over the last four years, with investors wanting their piece of a multitrillion-dollar opportunity.
According to one analyst, the wind could leave the sails of Wall Street’s hottest initial public offering in short order.
Meanwhile, valuation is an unmistakable concern for a high-flying AI applications stock.
Over the last four years, the artificial intelligence (AI) revolution has reshaped Wall Street. Providing software and systems with the tools to make autonomous, split-second decisions is a multitrillion-dollar global opportunity, and investors want their piece of the pie.
While most Wall Street analysts are overwhelmingly bullish regarding the AI infrastructure build-out, optimism isn't universal. According to select analysts, two of the most widely owned AI stocks, Space Exploration Technologies (SpaceX) (NASDAQ:SPCX) and Palantir Technologies (NASDAQ:PLTR), can plunge 48% and 54%, respectively, over the next year.
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SpaceX: Implied downside of 48%
Considering that Elon Musk's space infrastructure and AI conglomerate had 21 underwriters, all of which received shares, it's not surprising that buy ratings outpace sell ratings by a substantial sum. Nevertheless, analyst Glenn Thum of Phillip Securities slapped a sell rating and a $75 price target on shares of SpaceX.
Thum's low-water price target for Space Exploration Technologies primarily concerns its AI-driven operations. Although SpaceX's mile-long prospectus assigned a $28.5 trillion addressable market to AI, Thum notes that this segment's otherworldly spending and steep losses aren't yet worthy of a valuation premium.
$SPCX SpaceX Q2 FY26:
— App Economy Insights (@EconomyApp) August 4, 2026
• Revenue +92% Y/Y to $7.8B ($1.0B beat).
• Operating margin -2% (+22pp Y/Y).
• CapEx $18.4B (including $15.8B for AI).
• GAAP EPS -$0.09 ($0.20 beat). pic.twitter.com/Kak4BAlKft
Additionally, Thum's research note cautions that SpaceX's major compute deals with Alphabet (NASDAQ:GOOGL)(NASDAQ:GOOG) and Anthropic will expire in late 2029 and can be terminated by either party after this year with 90 days' notice. In other words, xAI's long-term growth and profitability are far from assured.
Don't overlook SpaceX's staggered and accelerated share-unlock period, either. Whereas most initial public offerings prohibit insiders from selling shares for 180 calendar days post-debut, early-release-eligible SpaceX insiders can sell some of their shares to retail investors at several earnings- and time-based events. The steady increase in the company's float would be expected to weigh on its share price through at least mid-December.
Image source: Getty Images.
Palantir Technologies: Implied downside of 54%
The other game-changing AI stock that can plunge, according to at least one Wall Street analyst, is AI-driven software-as-a-service (SaaS) provider Palantir Technologies.
Jefferies (NYSE:JEF) analyst Brent Thill raised his firm's price target on Palantir in early August from $70 to $80. The problem is that Palantir shares ended the Sept. 15 trading session at $172.56, implying 54% downside from Thill's call.
Thill's primary issue with Palantir is a common theme among Palantir skeptics: its valuation.
On the one hand, Palantir brings clearly defined competitive advantages to the table. Its Gotham SaaS platform has no large-scale competitors and assists the U.S. government and its allies in planning and overseeing military operations. This contract gravy train has allowed Palantir CEO Alex Karp to raise full-year sales guidance every quarter.
PLTR PS Ratio data by YCharts
On the flipside, history shows that price-to-sales (P/S) ratios above 30 aren't sustainable for companies at the forefront of innovative trends. Palantir entered 2026 with a P/S ratio above 100, and even with its outsize revenue growth is still sporting a trailing 12-month P/S ratio of 72. This is indicative of a bubble.
While Gotham's multiyear contracts would temporarily buoy Palantir if an AI bubble were to form and burst, the company's stratospheric valuation would make it a prime target during a bubble-bursting event.
Sean Williams has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Jefferies Financial Group, and Palantir Technologies. The Motley Fool has a disclosure policy.