2 Standout AI Stocks That Can Plunge Up to 93%, According to Select Wall Street Analysts

Source The Motley Fool

Key Points

  • The evolution of AI is the most meaningful advancement for corporate America in decades.

  • An AI applications company that’s soared more than 2,300% over the last four years may plummet by up to 59%, according to one analyst.

  • Meanwhile, an AI-driven company that revolutionized an industry has left many of its lofty innovative promises unfulfilled.

  • Motley Fool Issues Rare "Total Conviction" Buy Alert ›

Over the last four years, the evolution of artificial intelligence (AI) has been Wall Street's hottest trend. Empowering software and systems with the ability to make split-second, autonomous decisions is a technological leap forward that analysts believe is worth trillions of dollars.

While most analysts view the AI infrastructure build-out as the most meaningful advancement for corporate America in decades, optimism for individual AI stocks isn't universal. According to bottom-of-the-barrel price targets from select Wall Street analysts, two standout AI stocks, Palantir Technologies (NASDAQ:PLTR) and Tesla (NASDAQ:TSLA), can plunge up to 93%.

Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »

A person is circling and drawing an arrow to the bottom of a steep decline in a stock chart.

Image source: Getty Images.

Palantir Technologies: Implied downside of 59%

There may not be an applications company that's benefited more from the evolution of AI than software-as-a-service provider Palantir, whose shares have skyrocketed more than 2,300% since the AI-driven bull market began in October 2022.

Palantir's claim to fame is its AI- and machine learning-powered Gotham platform, which assists the U.S. government and its allies with military mission planning and oversight. This platform typically lands highly profitable multi-year deals and delivers sustainable double-digit sales growth.

Despite Palantir's outperformance, Jefferies (NYSE:JEF) analyst Brent Thill isn't a fan. Thill expects Palantir's shares to plummet to $80 per share, representing up to 59% downside.

Thill is skeptical that Palantir will be able to sustain its outsize growth much longer. More challenging year-over-year comparisons, coupled with moderating international growth, could make it difficult for Palantir to justify its premium valuation.

Speaking of valuation, no company at the forefront of a game-changing technology has sustained a price-to-sales (P/S) ratio above 30 for a lengthy period. Palantir entered 2026 with a P/S ratio above 100, and it's currently sporting a P/S ratio of approximately 82.

An all-electric Tesla Model Y SUV is parked in front of a Tesla dealership.

Image source: Getty Images.

Tesla: Implied downside of 93%

Electric-vehicle (EV) maker Tesla is another company in which AI is foundational to its success. AI plays an integral role in its full self-driving (FSD) software and is paramount to the success of Optimus, the company's humanoid robots.

Tesla revolutionized the auto industry by becoming the first EV-focused company to generate recurring profits. Elon Musk's company is also in the midst of diversifying its revenue stream through energy generation and storage products, and Optimus.

But none of these ventures have impressed GLJ Research founder and analyst Gordon Johnson. According to Johnson, Tesla is expected to plummet to $24.86 per share, or roughly 93% below where it ended the previous week. This oddly specific projection is arrived at by setting a 15X forward earnings multiple on Tesla and working backward with a 9% discount rate.

Johnson's skepticism concerns Tesla's innovations and its valuation.

Regarding the former, Johnson has been a longtime critic of FSD, citing safety data and disengagement rates as evidence that the technology isn't ready for autonomous application. It should be noted that, despite more than a decade of Musk claiming that Level 5 FSD was "one year away," Tesla hasn't advanced beyond Level 2 FSD.

Tesla's valuation is also eye-popping in all the wrong ways. Musk's company is expected to deliver low-double-digit annual sales growth in 2026 and 2027, yet trades at a forward price-to-earnings multiple of 172!

If just a handful of Elon Musk's unfulfilled promises are backed out of Tesla's valuation, the company's stock would likely crater.

Missed AI’s "Act 1"? Act 2 Could Be 14x Bigger

Most investors think they missed the AI boat because they didn't buy Nvidia in 2005.

But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout, a massive technology build-out that Google’s CEO says could be more profound than fire or electricity.

While everyone watches the chip designers, one "backbone" company provides the critical technology that Nvidia and AMD literally cannot function without. We’ve detailed this under-the-radar player in our new AI Playbook.

Continue »

Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Jefferies Financial Group, Palantir Technologies, and Tesla. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
The Fed will sit still on October 28 — but 100 of 100 economists now expect a December hikeA Reuters poll run October 16-20 found 94 of 100 economists expecting the Fed to hold at 3.75-4.00% on October 28 — and all 100 expecting a hike in December, against less than half a month earlier. The market is close to the same price, with CME FedWatch at roughly 17% for October and 82.8% for December. With the Fed in blackout since October 17, here are the five dates that decide the rest of the year, what each one is priced for, and the two directions each can take.
Author  Irene Q.
Oct 22, Thu
A Reuters poll run October 16-20 found 94 of 100 economists expecting the Fed to hold at 3.75-4.00% on October 28 — and all 100 expecting a hike in December, against less than half a month earlier. The market is close to the same price, with CME FedWatch at roughly 17% for October and 82.8% for December. With the Fed in blackout since October 17, here are the five dates that decide the rest of the year, what each one is priced for, and the two directions each can take.
placeholder
Gold Price Analysis Today | Forex Gold Analysis | XAU/USD Analysis - October 26, 2026Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 26, 2026. Read on for the details.
Author  Mitrade
Yesterday 01: 52
Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 26, 2026. Read on for the details.
placeholder
Big Tech's $800 billion AI bill faces its first real test — free cash flow is the judgeAlphabet and Microsoft report after the close on October 28, Amazon on October 29, with hyperscaler AI capex running near $800 billion a year. Meta's negative free cash flow and 9.40% drop on October 22 was the warning; this week's prints decide whether cloud growth and backlog can pay for the buildout. Here are the consensus numbers, the free-cash-flow table and the two-sided test.
Author  Irene Q.
Yesterday 05: 32
Alphabet and Microsoft report after the close on October 28, Amazon on October 29, with hyperscaler AI capex running near $800 billion a year. Meta's negative free cash flow and 9.40% drop on October 22 was the warning; this week's prints decide whether cloud growth and backlog can pay for the buildout. Here are the consensus numbers, the free-cash-flow table and the two-sided test.
placeholder
Gold breaks $4,000 as oil becomes the inflation problem — $3,943 is the line that mattersSpot gold closed at $3,995.6 on October 23, down about 4.1% for the week and at its lowest since mid-July, and traded near $3,988 on October 26 even as Brent crude settled at $116.72 and Middle East supply risk stayed elevated. The war premium stopped working because oil is now the inflation trade: December Fed hike odds are 68.9% and the 10-year yield is 4.988%. Here are the three numbers, the transmission chain, and the July low at $3,943 that decides whether this is a bottom or a bigger correction.
Author  Irene Q.
Yesterday 06: 41
Spot gold closed at $3,995.6 on October 23, down about 4.1% for the week and at its lowest since mid-July, and traded near $3,988 on October 26 even as Brent crude settled at $116.72 and Middle East supply risk stayed elevated. The war premium stopped working because oil is now the inflation trade: December Fed hike odds are 68.9% and the 10-year yield is 4.988%. Here are the three numbers, the transmission chain, and the July low at $3,943 that decides whether this is a bottom or a bigger correction.
placeholder
Bitcoin Price Forecast: Drops Below $80,000 in Fifth Straight Loss, May Test $75,000 as FOMC Meeting Approaches Bitcoin falls below the $80,000 mark as the October FOMC decision approaches, threatening a further dip toward $75,000.On October 26, Bitcoin (BTC) again lost the key psychological mark o
Author  TradingKey
Yesterday 10: 10
Bitcoin falls below the $80,000 mark as the October FOMC decision approaches, threatening a further dip toward $75,000.On October 26, Bitcoin (BTC) again lost the key psychological mark o
goTop
quote