AI Stocks: Bubble Trouble Ahead?

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Let me tell you about the time I tried to explain the concept of AI stocks to my sister. She thought I was talking about some new line of iPhones. “No,” I said patiently, “It’s Artificial Intelligence. Like robots, but smarter.” She nodded sagely and then asked if this was why her Netflix recommendations were so bad. I decided to change the subject.

But let’s talk about Palantir Technologies and CoreWeave—two companies that have been soaring like eagles this year, only for Wall Street analysts to predict they’ll crash like a toddler on a tricycle. Palantir is up 109%, and CoreWeave is up 175%, yet the experts are waving red flags like frantic air traffic controllers. Here’s why:

  • Brent Thill at Jefferies thinks Palantir could plummet 62%, putting it at $60 per share—down from its current $158. That’s like buying a designer handbag only to find out it’s made of pleather.
  • Keith Weiss at Morgan Stanley is equally skeptical about CoreWeave, predicting a 47% drop to $58 per share. That’s like ordering a gourmet burger and receiving a McDouble.

Now, Palantir isn’t just any tech company. They’re the folks who make software that helps governments and businesses sift through mountains of data like a caffeine-fueled librarian. They’ve got this fancy AI platform called AIP, which sounds like something out of a sci-fi movie but is actually just a tool for automating workflows. And Mark Giarelli at Morningstar thinks Palantir’s market could balloon to $1.4 trillion by 2033. That’s a lot of zeros.

But here’s the kicker: Palantir’s stock is currently trading at 126 times sales. To put that in perspective, Texas Pacific Land, the second-most expensive stock in the S&P 500, trades at a mere 31 times sales. Palantir could drop 75% and still be the priciest stock on the block. That’s like paying $500 for a pair of jeans and thinking, “What a bargain!”

Then there’s CoreWeave, the cloud infrastructure company that’s like the overachieving kid in the AI class. They’ve got what’s called a GPU cloud—basically a cloud on steroids—that’s perfect for AI workloads. SemiAnalysis ranked them as the best GPU cloud on the market, beating out heavyweights like Amazon and Microsoft. Impressive, right?

But CoreWeave’s financials are a mixed bag. Revenue jumped 420% to $981 million in the first quarter, but they also reported a net loss of $150 million. That’s like throwing a killer party but realizing you’ve spent your rent money on guacamole. Keith Weiss at Morgan Stanley worries about CoreWeave’s rapid AI infrastructure buildout, which could burn through cash faster than a teenager with a credit card.

So, what’s an investor to do? Well, if you’re holding Palantir or CoreWeave, maybe don’t sell the family farm just yet. But keep your positions small—like, “I-can-lose-this-without-crying” small. Because if these stocks do crash, you don’t want to be left holding the bag. Or worse, explaining it to your sister. 🤔

AI Stocks: Bubble Trouble Ahead?

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2025-07-30 11:39