2 Popular AI Stocks to Sell Before They Drop 70% and 60% in 2026, According to Wall Street Analysts
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Wall Street analysts think Palantir and Intel will decline this year.
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Palantir will need consistent, near-perfect performances to come close to justifying its valuation.
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Intel still hasn’t made any meaningful progress in its chip manufacturing business.
Palantir Technologies (NASDAQ:PLTR) And Intel (NASDAQ: INTC) Both posted impressive returns in 2025, finishing the year up 145% and 84% respectively. These were some of the highest returns. S&P 500 companies. Unfortunately, some Wall Street analysts think the party will soon be over in these stocks.
Time will tell how stocks will continue to perform, but if they fall below projected targets, that could spell bad news for existing investors. Let’s take a look at a few high-level reasons why this might happen.
Palantir develops artificial intelligence (AI) software that helps governments, institutions, and businesses organize and analyze large amounts of data. What started as just software used by governments has turned into a thriving commercial business. Palantir’s US commercial segment has been its fastest-growing business in recent quarters.
Apart from business performance, an analyst from RBC Capital set Palantir’s share price target at $50, a 70% decline from the last closing price of approximately $171.
Much of the doubt about Palantir’s stock stems from its valuation. It currently trades at: 169 times estimated earnings for next year (as of January 20) this is extremely expensive by almost all standards. This is significantly higher than the valuations of even some of the world’s fastest-growing tech giants.
There’s no way Palantir even remotely justifies its valuation (and I mean remotely), will need to maintain triple-digit percentage growth for many years to come. And this is unlikely to happen.
Intel’s 2025 stock performance was a much-needed turnaround from its 2024 performance. Investors seem to like the growing demand for central processing units that help power data centers. current artificial intelligence boom.
That demand didn’t stop one analyst Morgan Stanley Since Intel set its bear case price target at $19 per share, a 60% decline from its last price of around $47 per share.
One of Intel’s problems is that it hasn’t been able to make much meaningful progress in bringing its chip manufacturing business closer to the industry leader. Taiwan Semiconductor Manufacturing. Given Intel’s delays, unexpected rising costs, and low returns (percentage of chips working as intended), major companies choose to go with TSMC due to its efficiency and proven track record.
