Two Prominent AI Shares Predicted to Plummet by 55% and 68% as Perched by Some Financial Experts on Wall Street by 2025
Title: Tech Stocks on the Decline: Palantir and Super Micro Computer
Palantir Technologies (PLTR) and Super Micro Computer (SMCI) have seen significant gains in the last two years, boasting an impressive 1,110% and 305% increase, respectively. However, Wall Street analysts are warning investors that these tech stocks might be overvalued or overpriced.
Starting with Palantir, the stock currently trades at a price that Wall Street deems excessive. The median target of $39 per share represents a 52% downside from the current price of $80. Brad Zelnick at Deutsche Bank is particularly bearish, maintaining his sell rating and upgrading his 12-month target price to $26 — a 68% reduction from the current price.
Palantir's recent addition of an artificial intelligence (AI) platform called AIP has earned praise from industry experts. Forrester Research dubbed Palantir a leader in AI and machine learning platforms, and the company also ranked top in an AI, data science, and machine learning software study by Dresner Advisory Services. However, Palantir's valuation remains a point of contention, with only six companies in the S&P 500 having more sell ratings.
Meanwhile, Super Micro Computer (SMCI) has experienced a 305% growth over the past two years thanks to its superiority in AI servers. But like Palantir, many analysts view SMCI as overpriced. The median target of $28 per share indicates a 15% downside, with Susquehanna's Mehdi Hosseini even predicting a 55% fall from the current share price if certain concerns are not addressed.
Super Micro Computer's strengths lie in its internal manufacturing capabilities and flexible product development, allowing the company to stay ahead of competitors and enterprise clients in the AI server market. However, the company has faced challenges due to accounting allegations according to Hindenburg Research, a Justice Department probe, and an auditor resignation.
As both companies work to resolve their issues, investors should exercise caution. With Palantir's extremely high valuation and Super Micro Computer's accounting concerns, it might be wise to wait for more favorable entry points before investing. Current shareholders may want to reevaluate their positions as well.
Investors might need to approach Palantir's stock with caution due to its high valuation, considering analysts' median target of $39 per share represents a 52% decrease from the current price. In the case of Super Micro Computer, its 305% growth over the last two years might be overvalued, with the median target of $28 per share indicating a 15% potential downside.
