Three High-Flying AI Stocks Poised for 71% to 80% Declines, Per Wall Street Analysts#

Palantir Technologies: 71% Downside Risk#

Palantir Technologies (PLTR) has soared over 2,000% since 2023, driven by its unique Gotham and Foundry platforms, which offer unparalleled data-mining and machine-learning solutions. However, RBC Capital Markets analyst Rishi Jaluria predicts a drop to $40 from$137.30 (June 20 close), implying a 71% decline.

• Valuation Concerns: Palantir’s trailing-12-month price-to-sales (P/S) ratio is 110, far exceeding the 30–40 range where innovative tech bubbles historically burst.
• AI Bubble Risk: Past game-changing technologies, including the internet, faced bubble-bursting events. Palantir’s multiyear U.S. government contracts (Gotham) and corporate subscriptions (Foundry) provide some stability, but investor sentiment could drag shares down if an AI bubble bursts.
• Limited Growth Ceiling: Gotham’s reliance on U.S. government contracts limits its long-term growth potential, making the lofty P/S ratio harder to justify.

Key Data:

• Market Cap: $338B
• 52-Week Range: $21.23–$144.86
• Gross Margin: 80.01%
• Current Price (June 20): $143.23 (+2.37%)

Upstart Holdings: 72% Downside Risk#

Upstart Holdings (UPST), an AI-driven lending platform, has rallied 165% in the past year. Yet, Goldman Sachs analyst Michael Ng forecasts a drop to $16.50 from$64.95 (June 20 close), a 72% decline.

• Untested in Recession: Upstart hasn’t proven resilient through an organic U.S. recession, where loan demand typically slows and delinquencies rise.
• Interest Rate Sensitivity: The Federal Reserve’s rapid rate hikes (2022–2023) reduced loan demand. Despite recent rate cuts, the Fed’s cautious approach could continue to suppress lending.
• Valuation: Upstart trades at 39x current-year forecast EPS and 26x 2026 EPS, high for an unproven financial stock in a cyclical sector.

Key Data:

• Market Cap: $6B
• 52-Week Range: $20.60–$96.43
• Gross Margin: 97.05%
• Current Price (June 20): $64.95 (+9.95%)

CoreWeave: 80% Downside Risk#

CoreWeave (CRWV), an AI data-center infrastructure provider, has surged 360% since its March 2025 IPO, fueled by its 250,000 Nvidia Hopper GPUs. D.A. Davidson analyst Gil Luria predicts a fall to $36 from$172.62 (June 20 close), an 80% drop.

• Asset Depreciation: Nvidia’s annual release of advanced chips could devalue CoreWeave’s Hopper GPUs, reducing its compute capacity appeal.
• Financing Risks: High debt from unsecured notes and credit lines increases servicing costs, potentially prioritizing debtholders over shareholders.
• Valuation: At 8x next year’s sales (with 131% growth forecast), CoreWeave’s unprofitable, untested model carries significant risk.

Key Data:

• Market Cap: $83B
• 52-Week Range: $33.52–$187.00
• Gross Margin: 0.00%
• Current Price (June 20): $172.62 (-0.61%)

Investment Considerations#

While AI’s long-term potential is undeniable, these stocks face significant near-term risks:

• Market Risks: An AI bubble burst could hit overvalued leaders like Palantir, Upstart, and CoreWeave hard.
• Alternatives: The Motley Fool’s Stock Advisor recommends 10 stocks with stronger growth potential, excluding Palantir (793% average return vs. S&P 500’s 173% as of June 23, 2025).
• Strategy: Investors should diversify, focusing on time-tested companies or ETFs (e.g., VOO, IVV) for stability and long-term growth (10.7% annualized returns, 1957–2024).

Conclusion#

Palantir Technologies, Upstart Holdings, and CoreWeave have ridden the AI wave, but select Wall Street analysts see 71%–80% downside due to inflated valuations, untested models, and market risks. Investors should approach these stocks cautiously, prioritizing diversified, proven investments to navigate potential AI market volatility.