2 of the Most Sought-After AI Stocks Can Plunge Up to 68%, According to Select Wall Street Analysts

By Sean Williams – Mar 12, 2026 at 4:06AM ESTKey PointsPwC foresees the rise of artificial intelligence (AI) adding $15.7 trillion to the global economy by the turn of the decade.One AI application stock, which has rallied 2,350% since the start of 2023 and has an iron-clad sustainable moat, sports an unjustified premium according to a longtime bear.Meanwhile, another Wall Street analyst sees a popular AI-driven fintech company struggling to break free from its cyclical ties.For more than three years, the rise of artificial intelligence (AI) has captured the attention and capital of investors. Providing software and systems with the tools to make split-second decisions without human oversight is a global addressable opportunity that PwC analysts peg at $15.7 trillion by 2030. While most Wall Street analysts view the evolution of AI as a positive, not every company will necessarily benefit or justify its current valuation. According to select Wall Street analysts, two of the most sought-after artificial intelligence stocks -- Palantir Technologies (PLTR +0.30%) and Upstart Holdings (UPST 2.45%) -- can plummet up to 68% over the next year. Image source: Getty Images. Palantir has a sustainable moat premium for the ages Whereas Nvidia is the face of the AI revolution, in terms of infrastructure, Palantir is, arguably, the hottest AI stock from an application standpoint. Shares of Palantir have soared by 2,350% since the start of 2023. Palantir's AI and machine-learning-driven Gotham and Foundry software-as-a-service platforms have no large-scale competitors. Gotham assists the U.S. military and its allies in planning and overseeing military missions, while Foundry is an enterprise-focused subscription service that helps businesses make sense of their data. ExpandNASDAQ: PLTRPalantir TechnologiesToday's Change(0.30%) $0.46Current Price$151.60Key Data PointsMarket Cap$363BDay's Range$149.33 - $153.1752wk Range$66.12 - $207.52Volume31KAvg Vol49MGross Margin82.37% Despite Palantir's sustainable moat, longtime bear Rishi Jaluria of RBC Capital sees shares heading to $50. If accurate, this would represent a 68% decline from where shares ended on March 6. Jaluria previously cautioned that Foundry may be benefiting from several one-off sales and could be difficult to scale, given the differentiation needed to optimize Foundry for each client. But the biggest issue Rishi Jaluria has raised with Palantir is its valuation. Palantir spent the entire second half of 2025 at a price-to-sales (P/S) ratio above 100 and currently sports a trailing 12-month P/S ratio of 90. History shows that companies at the forefront of game-changing technologies haven't been able to sustain P/S ratios above 30. Palantir has a P/S ratio three times the level that's historically indicated the presence of a bubble. Image source: Getty Images. Upstart may struggle to break its cyclical ties Another highly sought-after AI stock that can take it on the chin in 2026, based on the recent prognostication of one Wall Street analyst, is cloud-based AI lending marketplace Upstart Holdings. On paper, Upstart's operating model is exciting. It's fully automating more than 90% of the loans being vetted on its platform, thereby saving its more than 100 bank and credit union partners time and money. Further, its data-driven vetting process, which goes well beyond credit scores, is broadening the consumer lending pool without worsening delinquency rates. ExpandNASDAQ: UPSTUpstartToday's Change(-2.45%) $-0.69Current Price$27.47Key Data PointsMarket Cap$2.7BDay's Range$26.66 - $29.1952wk Range$25.60 - $87.30Volume5.2KAvg Vol5.1MGross Margin97.62% Nevertheless, David Scharf of Citizens Financial Group foresees Upstart stock heading to $20. This bottom-barrel price target implies 28% downside from where shares ended on March 6. Scharf suggests that Upstart is going to struggle to break free of the cyclical ebbs and flows that often plague financial and fintech stocks. Even though Upstart can expedite the personal loan vetting process, demand is still highly dependent on the health of the U.S. economy and prevailing interest rates. What's more, Upstart is pushing into new loan origination lines, including auto and home equity loans. While these are considerably larger addressable markets, the margins from these segments may weigh on Upstart, relative to its margins from personal loans. Read NextMar 11, 2026 •By Keithen DruryPalantir Is Up More Than 2,200% Since 2023.

Can Its Run Continue?Mar 11, 2026 •By James HiresThe Biggest Bet in Tech Isn't on Polymarket. It's This AI Stock.Mar 10, 2026 •By Danny Vena, CPAPolymarket Joins Forces with Palantir to Bring Its Industry-Leading Artificial Intelligence (AI) to the Prediction MarketsMar 10, 2026 •By Leo SunA Once-in-a-Decade Opportunity: 1 AI Software Stock to Buy Hand Over Fist Right Now (Hint: It's Not Palantir)Mar 10, 2026 •By Patrick SandersTop Stocks to Double Up on Right NowMar 10, 2026 •By Adam SpataccoWhere Will Palantir Stock Be in 5 Years?About the AuthorSean Williams is a data-driven Motley Fool contributing analyst who's been investing for 27 years and has penned north of 15,000 articles. You'll find him at the intersection of politics and investing tackling macroeconomic topics of interest (Social Security and Donald Trump's economic/tax policies), analyzing which stocks billionaire investors (e.g., Warren Buffett) are buying and selling, and digging into how the world's most-influential businesses and trends -- everything from the evolution of artificial intelligence (AI) to the next stock split -- are changing Wall Street. He holds a B.A. in Economics from the University of California, San Diego.TMFUltraLongX@AMCScamStocks MentionedPalantir TechnologiesNASDAQ: PLTR$151.60(+0.30%)+$0.46NvidiaNASDAQ: NVDA$185.94(+0.64%)+$1.18Citizens Financial GroupNYSE: CFG$58.51(-0.65%)-$0.38UpstartNASDAQ: UPST$27.50(-2.34%)-$0.66*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.