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Wall Street analysts believe Palantir and Intel will experience downturns this year.
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Palantir would need consistent, near-perfect performance to come close to justifying its valuation.
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Intel still hasn’t made meaningful improvements to its chip manufacturing business.
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10 stocks we like better than Palantir Technologies ›
Palantir Technology (NASDAQ: PLTR) and Intel (NASDAQ: INTC) Both posted impressive returns in 2025, up 145% and 84% for the year, respectively. These are some of the highest paying S&P 500 Index company. Unfortunately, some Wall Street analysts think the feast for these stocks will soon be over.
It remains to be seen how their stocks continue to perform, but if they fall below projected targets, it would be bad news for current investors. Let’s look at a few high-level reasons why this happens.
Palantir develops artificial intelligence (AI) software that helps governments, agencies and businesses organize and analyze large amounts of data. What started as software used only by governments has grown into a burgeoning commercial business. Palantir’s U.S. commercial business has been its fastest-growing business in recent quarters.
Business performance aside, analysts at RBC Capital have a $50 stock price target for Palantir, a 70% drop from its latest closing price of nearly $171.
Much of the skepticism surrounding Palantir stock stems from its valuation. The company currently trades at 169 times its estimated earnings for next year (as of January 20), which is extremely expensive by almost any measure. Its valuation is even significantly higher than that of some of the world’s fastest-growing tech giants.
For Palantir to even remotely justify its valuation (I mean remote) and need to maintain triple-digit percentage growth for many years. And this is unlikely to happen.
Intel’s stock performance in 2025 is in dire need of a turnaround from its 2024 performance. Investors seem to like growing demand for its central processing units, which help power data centers that are crucial to the current artificial intelligence boom.
That demand hasn’t deterred analysts Morgan Stanley Intel’s pessimistic stock price target is set at $19, a 60% decline from its last share price of approximately $47 per share.
One problem for Intel is that it hasn’t made much meaningful progress in getting its chipmaking business closer to the industry leader TSMC. Due to Intel’s delays, unexpected cost increases, and declining yields (the percentage of chips that work as expected), large companies would rather choose TSMC because of its efficiency and proven track record.
