Revealing AI Stocks’ Dangerous Rise Amid Breakthrough Success and Imminent Challenges
Wall Street recently experienced a Super Bowl-like moment.
Nvidia’s (NASDAQ:NVDA) The much-anticipated quarterly results were expected to reveal the impact of artificial intelligence (A.I.) There will be a boom in the market. Nvidia and other AI stocks continue to rise on the report. This highlights the importance of identifying AI stocks to sell before a potential decline.
And once again, the chip manufacturing giant did not disappoint. Nvidia reported a staggering 265% year-over-year revenue jump (YoY comparison), significantly boosting investor sentiment. The event highlighted the pivotal role of AI in driving market dynamics.
For many analysts, this poses increased risk. S&P500A 24% increase in 2023 will come from technology companies. Critics warn that the profitability of AI technology remains uncertain, posing a potential threat to investors.
Let’s consider three AI stocks to sell that could erase recent gains if this rally reverses.
Palantir (PLTR)
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Palantir (New York Stock Exchange:PLTR) specializes in big data analytics, providing software that allows organizations to integrate, manage, and analyze vast amounts of information. The company operates in fields such as defense, intelligence, law enforcement, finance, and healthcare.
Palantir’s advanced integration platform (AIP) is at the heart of its service, facilitating analysis of complex data sets to identify patterns and insights. AIP Support your decision-making process by providing comprehensive, scalable solutions to data-driven challenges. This product has helped PLTR rise over 250% over the past 52 weeks.
Banking giant HSBC recently downgraded Palantir’s stock rating to “hold”, citing valuation as its biggest concern. Similarly, Jefferies analyst Brent Till said Palantir’s valuation is inflated.
“Stocks outperformed significantly last year on the back of hype.” A.I..and what we see is A.I. is a driver, but returns will be slow to materialize on the overall impact of this story and many others, including Microsoft and others,” Till said. Yahoo finance.
“So we’re big fans of what’s going to happen.” A.I.. But again, the hype is ahead of reality. ”
C3.AI
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C3.ai (New York Stock Exchange:A.I.) is another major beneficiary. A.I. wave.Company’s Software enables organizations to harness the power of: A.I.big data, and cloud computing for enterprise-scale development, deployment, and operations. A.I. Make your applications more efficient.
C3.ai also offers a suite of enterprise AI products that enable organizations to deploy scalable AI applications. These products include predictive maintenance, fraud detection, energy management, and customer engagement solutions. This is one of the main reasons AI stocks have risen about 50% over the past 52 weeks.
Despite the hype, the company’s forward-looking guidance does not incorporate this much-needed AI boost. The company recently reported a third-quarter loss of $0.13 per share, narrower than expected. Revenue was $78.4 million, up just 17.6% year over year.
C3.ai provided revenue guidance for the quarter between $82 million and $86 million. Although exceeding expectations, the implied future growth rate is less than 10% for him.
“Once the growth profile of the business accelerates and underlying profitability begins to flow through the model, we aim to move in a more constructive direction.” morgan stanley (New York Stock Exchange:M.S.) said analyst Sanjit Singh.
Singh rates the stock underweight, with a price target of $21 per share. A.I. stock. His price target suggests a downside risk of more than 30% for him.
Snowflake (SNOW)
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snowflake (New York Stock Exchange:snow) is a data storage and analysis business. Snowflake is a cloud-based platform that enables scalable, secure, and efficient data warehousing, allowing businesses to scale resources to meet their needs without sacrificing performance.
in the area of A.I.Snowflake powers machine learning and A.I.– Analytics-driven by seamlessly integrating with popular A.I. tools and frameworks. This integration enables users to derive valuable insights from their data to enhance decision-making and innovation.
Snowflake was also a major beneficiary of this policy. A.I. A wave that caused havoc on Wall Street. However, things quickly deteriorated following the release of the company’s fourth-quarter earnings report and the unexpected departure of CEO Frank Slotman. Frank Slotman has stepped down from his position effective immediately, but will remain on the Board of Directors.
Evercore ISI analyst Kirk Mattern said the new CEO, former senior vice president of AI Sridhar Ramaswamy, signals a surprising shift that Wall Street will need time to adapt to.
Snowflake’s fiscal 2025 product revenue is projected to be $3.25 billion, representing a 22% increase. Therefore, it was below analysts’ expectations of $3.43 billion, which is concerning, especially given his 38% growth in recent fiscal years.
Additionally, CFO Mike Scarpelli said the forecast is conservative as it is based on historical consumption patterns and does not include upcoming products currently in public preview. The company’s fiscal first-quarter outlook was also disappointing, with product sales forecast of $745 million to $750 million, below expectations of $759 million.
On the date of publication, Shane Neagle did not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing Guidelines.
