Since the artificial intelligence boom in 2022, Palantir Technologies and Nvidia stocks have surged 1,960% and 1,290%, respectively. Palantir leads in AI software but has a high price-to-sales ratio, while Nvidia’s market share in China dropped from 95% to 0% due to export restrictions.

Analysts like Brent Thill and Jay Goldberg have set target prices for Palantir at $70 (implying 60% downside) and Nvidia at $100 (implying 46% downside) respectively. While both companies have seen immense growth, some analysts believe the stocks are overvalued.

Palantir reported strong Q3 results with revenue up 63% to $1.1 billion and non-GAAP earnings rising over 100% to $0.21 per share. Despite impressive performance, Palantir trades at a steep valuation of 108 times sales, making it the most expensive stock in the S&P 500.

Nvidia dominates the AI infrastructure market with GPUs but faces challenges in China due to export restrictions. The company’s market share in China has plummeted from 95% to 0%, impacting its business in the world’s second-largest AI market.

While concerns exist over AI infrastructure spending and export restrictions, some analysts like Jay Goldberg at Seaport Research believe Nvidia’s stock could decline by 46%. However, with a reasonable P/E ratio of 54 and strong growth prospects, Nvidia remains an attractive AI stock to hold.

Investors considering Palantir Technologies should note that while the stock has seen significant growth, analysts like Brent Thill question its valuation. With a price target of $70 (implying 60% downside), some believe Palantir may not be the best option for investors looking to capitalize on the AI boom.

Read more at Nasdaq: 2 Popular AI Stocks to Sell Before They Drop 47% and 60%, According to Wall Street Analysts