Analysts Warn of Significant Stock Price Declines for Palantir and CoreWeave
Wall Street analysts project major stock declines for Palantir and CoreWeave despite recent surges.
Key Points
- • Palantir stock expected to drop by 62% to a target of $60, currently at $158.
- • CoreWeave shares may fall 47% to $58, up from a significant gain this year.
- • Palantir's high valuation poses investment risks despite market growth potential.
- • CoreWeave's rapid revenue growth is hampered by $8.7 billion in debt and cash burn.
Despite substantial gains in the stock prices of Palantir Technologies and CoreWeave, Wall Street analysts are cautioning investors about impending losses. Palantir's stock has surged over 100% this year, yet analysts predict a staggering drop of 62%, with a target price set at $60 against its current price of $158. Jefferies analyst Brent Thill points to Palantir's extreme valuation, trading at 126 times sales, making it the most expensive stock in the S&P 500.
In contrast, CoreWeave, which has enjoyed a remarkable increase of 175% in its stock this year, is projected to decline by 47% to a target of $58. While CoreWeave has demonstrated impressive revenue growth of 420%—reaching $981 million—its substantial debt of $8.7 billion raises serious concerns about long-term profitability and sustainability in its operational model.
Market insights reveal Palantir's substantial growth opportunities, with its market potentially reaching $1.4 trillion by 2033. However, despite this potential, investors remain wary due to the company's overvaluation and heavy spending on AI infrastructure, which has contributed to CoreWeave's $150 million non-GAAP net loss.
Overall, analysts advocate for caution in investing in these stocks, emphasizing the need for smaller positions until profitability and market conditions become clearer.