Wall Street analysts predict that Palantir and Tesla stocks will fall significantly this year

From Nasdaq: 2025-02-05 04:55:00

Palantir Technologies (NASDAQ: PLTR) and Tesla (NASDAQ: TSLA) were popular among retail investors in 2024, but analysts predict both stocks will decline this year. Analysts expect Palantir to drop 73% from its current price of $102, while Tesla could fall 65% from its current share price of $390.

Palantir reported strong fourth-quarter results, with sales up 36% to $828 million and adjusted net income rising 75% to $0.14 per share. Despite this, Wall Street analysts remain skeptical, with the consensus expecting a 17% increase in adjusted earnings in the next four quarters.

The International Data Corporation projects a 41% annual increase in AI platform spending through 2028, offering Palantir growth opportunities. However, caution is advised due to the stock’s high valuation, with Morningstar raising its target price to $90.

Tesla’s fourth-quarter results were disappointing, with revenue up only 2% to $26 billion and operating margin contracting. Despite this, the company’s long-term prospects in autonomous driving technology remain strong, with CEO Elon Musk confident in the potential for robotaxi services.

ARK Invest foresees a $10 trillion market for robotaxis by the early 2030s, supporting Tesla’s outlook. While Wall Street expects a 19% increase in adjusted earnings, the stock’s current valuation of 160 times earnings is considered high.

Investors should consider potential dips in both Palantir and Tesla as opportunities to buy, as the companies are expected to be worth more in the future. Patient investors comfortable with volatility may benefit from these potential buying opportunities.



Read more at Nasdaq: 2 Popular AI Stocks to Sell Before They Fall 65% and 73%, According to Certain Wall Street Analysts