3 Skyrocketing Artificial Intelligence (AI) Stocks That Can Plummet 71% to 80%, According to Select Wall Street Analysts

Wall Street analysts are increasingly flagging significant downside risk for several high-flying AI stocks, despite widespread industry optimism. Palantir Technologies (PLTR) faces a projected 71% decline, primarily due to its extreme 110x trailing P/S ratio and limited market for its key Gotham platform. Upstart Holdings (UPST) is anticipated to drop 72%, with concerns centered on its untested model in economic downturns and sensitivity to interest rates. CoreWeave (CRWV) could plummet 80%, driven by risks of rapid asset depreciation for its GPU infrastructure, a leveraged financing structure, and high valuation despite unprofitability, underscoring broader concerns about sustainability in the AI sector's frothy valuations.

Analysis

Despite widespread enthusiasm for artificial intelligence, specific high-flying stocks are drawing significant bearish calls from Wall Street analysts, primarily centered on unsustainable valuations and fundamental business risks. Palantir Technologies (PLTR) faces a projected 71% downside from RBC Capital Markets, driven by an exceptionally high trailing price-to-sales ratio of 110, which is roughly three times the historical level where tech bubbles tend to burst. This valuation concern is compounded by the limited long-term growth ceiling of its key government-facing Gotham platform. Similarly, Upstart Holdings (UPST) is projected to decline 72% by Goldman Sachs, citing the AI-lending model's unproven resilience in a recession, its sensitivity to monetary policy, and an aggressive valuation at 39 times forecast earnings, which is atypical for a cyclical financial company. Finally, AI infrastructure provider CoreWeave (CRWV) is flagged for a potential 80% plunge by D.A. Davidson due to the rapid depreciation risk of its Nvidia GPU assets, a leveraged financing structure that may not benefit shareholders, and a valuation near 8 times sales despite a lack of profitability. These specific cases highlight a broader market concern that investor sentiment has pushed valuations for some AI-related companies far ahead of their operational performance and durable competitive advantages.

Key Decisions for Investors

• Investors holding Palantir, Upstart, and CoreWeave should re-evaluate their positions given the specific valuation and fundamental risks that imply potential downside of 71% to 80%.
• It may be prudent to consider trimming exposure or employing hedging strategies on AI stocks with exceptionally high valuations, such as Palantir's 110x trailing P/S ratio, as they are particularly vulnerable to a sector-wide sentiment correction.
• Beyond the general AI theme, investors should conduct deeper due diligence on specific business model risks, such as CoreWeave's asset depreciation cycle or Upstart's sensitivity to economic downturns and interest rates.