Palantir (PLTR) and CoreWeave Stocks Surge, But IBKR Warns of Meme-Like Risks
Palantir (PLTR, Financials) and CoreWeave (CRWV, Financials) are trading more like meme stocks than traditional tech names, according to Interactive Brokers (IBKR, Financials), which warned Wednesday that investor enthusiasm is ignoring underlying fundamentals.
CoreWeave, a cloud compute rental firm backed by Microsoft (MSFT, Financials), has jumped nearly fourfold since its downsized March IPO. Palantir, known for its AI-driven data analytics and government contracts, is up more than 460% in the past year. Both stocks have benefited from investor hopes of Nvidia (NVDA)-like returns, but IBKR's Steve Sosnick cautioned the snapback can be substantial.
Despite strong AI-related demand and growing revenue expectationsCoreWeave is projected to more than double revenue this year, and Palantir is forecast to grow 36%valuations remain stretched. Palantir trades at 71 times sales, the highest in the S&P 500, while CoreWeave trades at 10 times despite posting a $315 million Q1 loss.
Retail investors remain undeterred. IBKR data shows both stocks are among the most heavily traded by its clients, often alongside leveraged ETFs. Vanda Research also flagged a rise in retail interest in speculative AI names.
Bullish arguments include Nvidia's investment in CoreWeave, a new OpenAI deal, and expanding U.S. government deals under the Trump administration for Palantir. But Deepwater's Gene Munster called the trend meme investing and warned it remains risky.
Wall Street analysts are more cautious. PLTR's average price target suggests a 23.4% downside, while CRWV faces an implied 69% drop from current levels.
This article first appeared on GuruFocus.
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