In the last two years, there has been no larger Wall Street catalyst or surprise trend than the rise of Artificial Intelligence (AI). The ability for AI-powered programs and systems to be more efficient in their assigned tasks, as well as evolving to learn new skills over time, gives this game-changing technology an almost unlimited level.
Although a surprisingly resolvable market of $ 15.7 trillion in 2030, based on PwC estimates in Size of prizeNot all Wall Street analysts are optimistic about the company leading the AI allegations. Keep in mind that analysts 'price targets are smoother and more often reactive than two seemingly unstoppable AI stocks could fall as much as 94% in 2025, based on Wall Street analysts' price targets. Selected.
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Although the company's graphics processing unit (GPU) Nvidia Interestingly, there has probably been no hotter AI stock on the planet in recent months than cloud-based data mining experts. Palantir Technology(NASDAQ: PLTR).
Palantir shares have risen 343% this year as of Dec. 6 and 980% over the next two years. These huge returns are a function of the Gotham platform powered by AI and AI- and machine-learning Foundry platforms. Distinctive in scale.
Gotham is a service used by the federal government for mission planning and execution, as well as data collection. Since these contracts usually last four or five years and are immediately with the US government and allies, Palantir can generate predictable operating cash flows with little concern about payments.
At the same time, Foundry aims to help businesses better understand their data to streamline their operations and increase profits. The division was still the fastest in its expansion, with Foundry's commercial subscriber numbers up 51% to 498 during the last quarter of September from a year earlier.
Despite this perfect location for Palantir, RBC Capital analyst Rishi Jaluria believes the company's stock is worth $ 9 (drums), which would represent a staggering 88% drop from where the stock closed at. December 6th. Jaluria said in a recent investor note,
We can not discern why Palantir is the most expensive name in the program … the absence of a quarter of beats and a huge increase that increases the growth trajectory of the near term, the rating seems. Like unsustainable.
Without question, evaluation is the biggest concern with Palantir. Based on Wall Street's combined sales forecast of $ 3.47 billion for 2025, it is worth 50 times next year's revenue. The market-leading company in a bubble has traditionally reached 40 times sales in the past (for example, before the dotcom bubble). Much of the value from Palantir's sale goes beyond the historic bubble land.
Another problem for Palantir is that there are natural ceilings built in the for-profit Gotham section. Although it is generating huge revenue from the US government and its allies immediately, most world governments will not have access to this AI-driven platform, which limits its long-term appeal.
While Palantir has a mole that appears to be safe, its near climbing is unlikely to be sustainable.
Model 3 is Tesla's best-selling car. Image source: Tesla
Another artificial intelligence stock that at least one Wall Street analyst believes will fall in the new year is electric vehicle (EV). Tesla(NASDAQ: TSLA).
Since Donald Trump won his bid for re-election last month, shares of Tesla have been burning rubber until they rise. CEO Elon Musk's relationship with the president-elect is being seen as positive for Tesla. With Trump in the Oval Office, the possibility of self-driving regulations being relaxed could clear the way for Tesla to fulfill its ambitious plan to flood the streets with robotaxis in the coming years. AI plays a key role in Tesla's full-fledged self-driving technology.
Tesla bulls are also excited about the company's continued push into energy products. Energy generation and storage revenue rose 52% in the third quarter to $ 2.38 billion from a year earlier, with the segment providing more profit expectations than EV sales.
And don’t forget about Tesla’s biggest challenge: proven profits. Tesla is closing for the fifth consecutive year of the generally accepted earnings of accounting principles (GAAP). Meanwhile, the EV segment for legacy automakers and most recent venture businesses has not yet accounted for a quarter of GAAP profits.
But according to GLJ Research's Gordon Johnson, longtime Tesla bears, North America's leading EV stock is heading for a split. Johnson's specific price target for Tesla is $ 24.86 per share, which comes with a forward-looking forward margin of 15 on the stock, as well as a 9% discount on the current stock price. If Johnson is right, Tesla shares will fall 94% by 2025.
Although Johnson has criticized the security of Tesla EVs and its accounting practices in the past, there are three other reasons why the company’s current stock price of $ 389.22 is unreasonable.
To begin with, competition has grown in a big way in the EV arena and making Tesla’s strong car margin look like a pedestrian. Since its inception in 2023, Tesla has halved the cost of its fleet to boost demand and keep inventory levels unchanged. Despite the drastic reduction, global inventory continued to grow and its operating margins fell. Paying 119 times the multi-year profit for a car stock that pays no higher than the old carmaker is unreasonable.
Second, 51% of Tesla's pre-tax revenue this year came from unstable sources, including car regulatory credit and its cash interest income. Investors will expect the company to trade at a significant premium price that will yield a profit from its operations. But in reality, most of Tesla's profits come from unstable sources.
The third problem for Tesla is that Elon Musk has a poor record of meeting expectations. Investors take Musk’s promises into the company’s appraisal, but he always fails to deliver. For example, he promised that Level 5 self-driving would be more than a decade away. Supporting Musk's failed promise out of the equation would cause Tesla's share price to plummet.
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Sean Williams Not listed in any of the listed stocks. Motley Fool is positioned and mentors Nvidia, Palantir Technologies and Tesla. The Motley Fool has Disclosure Policy.
