Everyone has fallen in love with artificial intelligence (AI) stocks, and for good reason. But that does not mean investors should buy stakes in these companies and ignore valuation, which always matters in the long run.
Plenty of AI stocks have soared by three-figure percentages in the last year. This makes them dangerous to buy if you ignore fundamental analysis.
Palantir Technologies (NASDAQ: PLTR) and BigBear.ai (NYSE: BBAI) are two hyped AI stocks that are up big in the last year. Wall Street analysts — who typically give aggressive price targets — have consensus targets for both stocks that are 25% below where they trade today. Here’s why investors who own Palantir and BigBear.ai should sell right now.