Analysts Forecast Major Downside for AI Stocks PLTR and SMCI

Investors should take heed: analysts suggest major declines are imminent for Palantir and Super Micro. Palantir Technologies faces a 62% drop potential, while Super Micro Computer is projected to decline by 74%.

Date: 22-02-2025

AI Rating: 4

Market Sentiment: The recent analysis highlights significant concerns regarding the future pricing of Palantir Technologies and Super Micro Computer. Wall Street analysts have set aggressive target prices that suggest alarming declines for both companies, indicating a bearish sentiment in the market.

Palantir Technologies (NASDAQ: PLTR): Analysts from RBC Capital and Jefferies have announced their sell recommendations with target prices that reflect a potential 62% decrease from its current price of $106. Although the company has shown strong performance metrics, including a 36% increase in revenue and a 75% rise in non-GAAP net income to $0.14 per diluted share, the concern lies in its current valuation appearing extremely high at 255 times adjusted earnings. While Palantir has met or exceeded earnings estimates in recent quarters, the market's skepticism over sustainability and valuation could lead to a downward correction.

Super Micro Computer (NASDAQ: SMCI): The firm has also received downgrades, with analysts indicating a potential downfall of 74% from its present share price of $59. The lack of proprietary advantages and the competitive threat from larger companies pose significant hurdles for Super Micro. Additionally, after facing scrutiny from a short selling report and regulatory issues, the company reduced its fiscal 2025 revenue outlook by 13%. This raises further concerns about its financial health and transparency.

Both companies' negative assessments by analysts may lead investor sentiment towards a more cautious approach, with current shareholders potentially reconsidering their positions. This reinforces the risk of substantial volatility and downside pressure on stock prices.

Stocks: PLTR SMCI