Wall Street analysts are issuing cautious warnings for several prominent AI-focused companies, predicting significant stock declines for Palantir Technologies and Intel in 2026. Rishi Jaluria of RBC Capital forecasts Palantir could drop 72% to $50 per share from its current $183, citing its valuation at 115 times sales as unsustainable. Similarly, Joseph Moore from Morgan Stanley expects Intel to fall 50% to $19 per share from $38, noting its lost CPU market share and a 23% revenue decline over three years despite the broader AI boom. In contrast, Micron Technology's stock has surged, driven by robust demand for AI hardware. The company reported strong Q1 FY 2026 results, exceeding expectations with $13.64 billion in revenue and $4.78 EPS, alongside a gross margin of 56.8%. Micron's High Bandwidth Memory (HBM3e) production is already sold out for 2026, indicating continued scarcity and strong pricing. Meanwhile, some previously overlooked AI stocks like UiPath, GitLab, and Adobe are showing resilience. UiPath's Maestro platform manages AI agents, GitLab's Duo Agent assists programmers, and Adobe maintains 10% to 11% revenue growth by integrating its Firefly AI and Alphabet's Gemini models. The AI cloud infrastructure market saw mixed results in 2025. While demand was high, investors are now questioning future profits and the debt incurred for new data centers. Private-equity firm Brookfield is entering this space, launching its own cloud business to reduce AI development costs, aiming to compete with major players like Amazon. Cloudflare emerged as a top stock winner, gaining 80%, but Oracle experienced a significant rise followed by a 40% fall after a $300 billion OpenAI deal raised debt concerns, highlighting a dangerous market concentration on OpenAI. Nvidia, a dominant force in AI chips, is employing strategic licensing deals to maintain its over 80% market share and avoid antitrust scrutiny. Its $20 billion licensing agreement with AI startup Groq, which includes licensing Groq's inference technology and hiring top executives, has sparked concern among venture capital investors. They fear diluted returns and loss of control, leading to demands for stronger protections in new funding agreements. Despite its market position, Wedbush analyst Dan Ives did not include Nvidia in his top five AI stock picks for 2026, though he still considers it a top technology stock. US stock futures saw a slight dip on December 31, 2025, but major indexes are set to end the year with strong gains, fueled by excitement around AI-focused stocks and President Trump's tariff uncertainties. Analysts anticipate a broader market performance in 2026. Super Micro Computer Inc. stock fell 1.7% to $29.15 on the same day, partly due to the retirement of its Senior Vice President of Operations, George Kao, underscoring investor sensitivity to execution risks in the critical AI infrastructure sector.
Key Takeaways
- Wall Street analysts predict Palantir Technologies stock could fall 72% to $50 per share and Intel stock could drop 50% to $19 per share in 2026.
- Palantir is considered overpriced at 115 times sales, while Intel faces challenges with lost CPU market share and a 23% revenue decline over three years.
- Micron Technology's stock soared due to strong AI hardware demand, reporting $13.64 billion in Q1 FY 2026 revenue and selling out its HBM3e production for 2026.
- Private-equity firm Brookfield is launching a new cloud business to lower AI development costs, aiming to compete with major tech firms like Amazon.
- AI cloud infrastructure investments in 2025 showed mixed results, with concerns over future profits and debt, especially after Oracle's stock fell 40% following an OpenAI deal.
- Nvidia secured a $20 billion licensing deal with AI startup Groq, acquiring inference technology and executives without a full acquisition.
- Nvidia's Groq deal has worried venture capital investors, who now demand stronger protections in funding agreements due to fears of diluted returns and loss of control.
- Wedbush analyst Dan Ives did not include Nvidia in his top five AI stock picks for 2026, though he still considers it a top technology stock.
- Underrated AI stocks like UiPath, GitLab, and Adobe are adapting; UiPath offers Maestro, GitLab introduced Duo Agent, and Adobe integrates Firefly AI and Alphabet's Gemini.
- Super Micro Computer Inc. stock fell 1.7% on December 31, 2025, partly due to an executive retirement, highlighting investor sensitivity to execution risks in AI infrastructure.
Analysts warn Palantir and Intel stocks may fall sharply in 2026
Wall Street analysts predict significant drops for Palantir Technologies and Intel stocks in 2026. Rishi Jaluria from RBC Capital expects Palantir to fall 72% to $50 per share from its current $183. Joseph Moore of Morgan Stanley forecasts Intel could drop 50% to $19 per share from $38. Analysts consider Palantir overpriced at 115 times sales, an unsustainable premium. Intel has lost CPU market share and its revenue declined 23% over three years despite the AI boom. Investors should be cautious with these AI stocks.
Wall Street analysts predict big drops for Palantir and Intel stocks
Wall Street analysts forecast significant declines for Palantir Technologies and Intel stocks in 2026. Rishi Jaluria from RBC Capital set a $50 target for Palantir, implying a 72% drop from its $183 price. Joseph Moore at Morgan Stanley predicts Intel could fall 50% to $19 per share from $38. Palantir is seen as overpriced, trading at 115 times sales, which analysts believe is unsustainable. Intel faces challenges with lost CPU market share, a struggling foundry business, and a 23% revenue decline over three years. These predictions suggest investors should be careful with these AI-focused companies.
Micron stock soars on strong AI hardware demand
Micron Technology's stock has risen sharply, driven by high demand for AI hardware. The company reported strong Q1 FY 2026 results in mid-December, beating Wall Street expectations with $13.64 billion in revenue and $4.78 EPS. Micron's gross margin significantly improved to 56.8%, showing strong pricing power for its High Bandwidth Memory HBM. Management expects about $18.7 billion in revenue for the current quarter, nearly doubling last year's figures. Analysts like Rosenblatt Securities raised price targets, with some seeing a 'super-cycle' for memory due to sustained AI application demand. Micron's HBM3e production is already sold out for 2026, highlighting continued scarcity and strong prices.
Brookfield launches cloud business to cut AI costs
Private-equity firm Brookfield is launching its own cloud business. The company aims to compete with major tech firms like Amazon. Brookfield believes it can lower the costs associated with developing artificial intelligence. This move makes Brookfield the first major investment firm to lease chips for this purpose.
AI cloud investments in 2025 show mixed results
AI cloud infrastructure was a major investment focus in 2025, driven by high demand for AI. However, investors are now questioning future profits and the debt used to build new data centers for 2026 and 2027. Cloudflare was a top stock winner, gaining 80%, while Oracle saw a significant rise and then a 40% fall after a $300 billion OpenAI deal raised debt concerns. The market shows a dangerous concentration on OpenAI, a private company central to large AI orders but currently losing money. The US government, under President Trump, also influenced the market with a $500 billion plan to bring tech production back to America.
Wedbush analyst names top 5 AI stocks for 2026
Dan Ives, a leading technology analyst at Wedbush Securities, has shared his top five artificial intelligence stock picks for 2026. Surprisingly, Nvidia, a major player in AI, is not on his list of top five choices. Despite this, Wedbush Securities still considers Nvidia a top technology stock for the upcoming year. Ives mentioned other 'Magnificent Seven' stocks, a 'cult' stock, and a software company as part of his recommendations.
Nvidia Groq deal sparks investor concern over AI startups
Nvidia's $20 billion licensing deal with AI startup Groq has worried venture capital investors. The agreement allows Nvidia to license Groq's inference technology and hire its top executives, including the CEO, without a full acquisition. This type of hybrid deal, blending licensing and talent poaching, makes investors fear their returns could be diluted and they might lose control. As a result, investors are now demanding stronger protections in new funding agreements, such as minimum return clauses and anti-dilution rights. Nvidia uses this strategy to maintain its over 80% share of the AI chip market and avoid antitrust problems. The deal highlights the risks for investors backing smaller companies that challenge dominant players like Nvidia.
Three underrated AI stocks poised for big wins in 2026
Some stocks previously seen as AI losers, like UiPath, GitLab, and Adobe, could become major winners in 2026. UiPath, known for robotic process automation, now offers its Maestro platform to manage both AI agents and software bots, making it a key part of the AI stack. GitLab, a DevSecOps platform, continues strong revenue growth of 25% to 35% and introduced its Duo Agent solution to help programmers. Adobe has maintained 10% to 11% revenue growth in fiscal 2025, using its Firefly AI model and integrating others like Alphabet's Gemini to support its offerings. These companies are showing how they can adapt and thrive in the evolving AI landscape.
US stocks dip at year end but eye strong 2025 gains
US stock futures saw a slight dip on December 31, 2025, during the final trading session of the year. Despite this, Wall Street's major indexes, including the S&P 500 and Dow, are set to end 2025 with strong yearly gains. The year was marked by President Donald Trump's tariff uncertainties and excitement around AI-focused stocks, which pushed all three indexes to record highs. Analysts expect a broader market performance in 2026, with more opportunities across different sectors and international markets. Trading volumes were low during the holiday-shortened week, and markets will close on Thursday for New Year's Day.
Super Micro stock falls after operations executive retires
Super Micro Computer Inc. stock fell 1.7% to $29.15 on December 31, 2025, partly due to news of an executive retirement. George Kao, the Senior Vice President of Operations, will retire, and Tom Xiao will take over his duties. Investors are sensitive to any potential execution risks, especially as AI infrastructure spending remains a key focus, with companies like Elon Musk's xAI expanding compute capacity. The stock drop also occurred during thin year-end trading, which can make price swings more dramatic. Super Micro aims to stand out by offering fast delivery and customized, liquid-cooled systems for data centers. Investors will now watch for details on the transition and any impact on production schedules.
Sources
- 2 Popular AI Stocks to Sell Before They Drop 50% and 72% in 2026, According to Certain Wall Street Analysts
- 2 Popular AI Stocks to Sell Before They Drop 50% and 72% in 2026, According to Certain Wall Street Analysts
- Micron’s Meteoric Rise: Fueled by the AI Hardware Surge
- Brookfield to Start Cloud Business to Lower Cost of AI
- The Top AI Cloud Investment Stories Of 2025
- Tech’s biggest bull lists his top 5 AI stocks for 2026. Nvidia isn’t one of them.
- Nvidia’s $20B Groq Deal Alarms AI Investors, Spurs Protections
- By 2026, These Underrated AI Stocks Could Be the Market's Biggest Winners
- US stock futures inch down in thin trading, but Wall Street eyes yearly gains
- Why Super Micro (SMCI) stock is down today: an exec retirement filing meets year-end AI trade
Comments
Please log in to post a comment.