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Globe and Mail
27 minutes ago
- Globe and Mail
2 Popular Artificial Intelligence (AI) Stocks to Sell Before They Fall 47% and 62%, According to Wall Street Analysts
Key Points Palantir and CoreWeave have more than doubled in value this year, but certain Wall Street analysts expect the stocks to decline sharply in the next 12 months. Palantir is ideally positioned to capitalize on demand for artificial intelligence platforms, but it is also the most expensive stock in the S&P 500 by a long shot. CoreWeave is a leader in cloud artificial intelligence services, but the company has taken on a substantial amount of debt to build AI infrastructure. 10 stocks we like better than Palantir Technologies › Palantir Technologies (NASDAQ: PLTR) and CoreWeave (NASDAQ: CRWV) shares have increased 109% and 175%, respectively, this year. But some Wall Street analysts think the popular artificial intelligence stocks are likely to crash in the next 12 months, as detailed below: Brent Thill at Jefferies recently set Palantir with a target price of $60 per share. That implies 62% downside from its current share price of $158. Keith Weiss at Morgan Stanley recently set CoreWeave with a target price of $58 per share. That implies 47% downside from the current share price of $110. Here's what investors should know about Palantir and CoreWeave. Palantir Technologies: 62% implied downside Palantir develops analytics software for commercial and government customers. Its core platforms (Foundry and Gotham) help organizations manage and make sense of complex data. The company also develops an artificial intelligence platform called AIP, which lets clients apply large language models to analytics workflows and build generative AI applications. Importantly, Palantir has distinguished itself with an ontology-based software architecture. An ontology is a framework that links digital information to real-world assets to facilitate better decision-making. The software also captures operational outcomes and feeds that information back to the ontology, creating a feedback loop that produces deeper insights over time. Mark Giarelli at Morningstar explains, "The core ontology function and value proposition is that Palantir not only organizes and displays data, but it also creates prioritized, ranked data that can be quickly understood and interacted with, ultimately automating real-world efficiency gains." He expects Palantir's addressable market to reach $1.4 trillion by 2033. Jefferies analyst Brent Thill acknowledges Palantir is successfully executing on a massive opportunity. "I think the company is incredibly well run. It's a fundamentally sound story. But the valuation doesn't make any sense," he told Barron's when the stock traded under $100 per share in May. The stock now trades at $158 per share, so it stands to reason that Thill thinks the valuation is even more outrageous today. Indeed, Palantir currently trades at 126 times sales, making it the most expensive stock in the S&P 500 by a long shot. The next most richly valued company is Texas Pacific Land at 31 times sales. That means Palantir's share price could fall 75% and it would still be the most expensive stock in the S&P 500. The market is enamored with Palantir for good reason. Some analysts even think its data analytics tools could become as foundational as Salesforce 's CRM software. But the current valuation is a clear source of downside risk. I think the stock could drop 60%+ if future growth fails to meet expectations, so shareholders should keep their positions very small. CoreWeave: 47% implied downside CoreWeave provides cloud infrastructure and software services. Its platform (called a GPU cloud) is purpose-built for artificial intelligence and other demanding workloads. Research company SemiAnalysis recently ranked CoreWeave as the best GPU cloud on the market, awarding it higher scores than peers like Amazon, Microsoft, and Alphabet 's Google. CoreWeave reported impressive first-quarter financial results. Revenue increased 420% to $981 million and adjusted operating income (which excludes stock-based compensation and interest payments) increased 550% to $162 million. However, the company reported a non-GAAP net loss of $150 million (up from $24 million last year) as interest payments on its $8.7 billion in debt cut deeply into profitability. Morgan Stanley analyst Keith Weiss said CoreWeave's strong financial results and ability to win major clients like OpenAI validate its leadership position in what could be a $360 billion market by 2028. However, he also expressed concern about the recent acceleration in its AI infrastructure buildout, which will increase cash burn through higher interest payments and capital expenditures in the near term. CoreWeave's initial public offering (IPO) took place in March, so the company has only been public for four months. Limited historical data, coupled with heavy AI infrastructure spending, make it difficult to guess how profitable CoreWeave will be. That makes it very challenging to value the stock today, which explains the wide range of target prices among Wall Street analysts: $32 per share at the low end to $185 per share at the high end. The stock currently trades at 21 times sales. That look expensive when only six stocks in the S&P 500 have higher valuations. But CoreWeave's sales are expected to increase at 129% annually through 2026, which makes the multiple more tolerable. I doubt shares will drop 47%, but it would be prudent to keep positions in this stock very small until the company is closer to profitability. Should you invest $1,000 in Palantir Technologies right now? Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $633,452!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,083,392!* Now, it's worth noting Stock Advisor's total average return is 1,046% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Trevor Jennewine has positions in Palantir Technologies. The Motley Fool has positions in and recommends Alphabet, Jefferies Financial Group, Microsoft, Palantir Technologies, and Salesforce. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Globe and Mail
27 minutes ago
- Globe and Mail
Bargain Retail Is Booming. 3 Stocks to Buy to Capitalize on the Trend in 2025
Key Points TJX's off-price business is growing as it gobbles up liquidated inventories. Costco's warehouse clubs are still expanding and locking in more shoppers. Dollar Tree's divestment of Family Dollar could be a game-changer. These 10 stocks could mint the next wave of millionaires › The retail apocalypse -- which was caused by expanding e-commerce marketplaces, the decline of malls, and a shrinking middle class -- wiped out many retailers over the past decade. The Great Recession and the COVID-19 pandemic exacerbated that destructive downturn. However, many bargain retailers still thrived and expanded as their higher-priced peers retreated. According to Business Research Insights, the global discount retail market could continue to expand at a robust compound annual growth rate (CAGR) of 10.5% from 2025 to 2033. Let's take a look at three of those resilient bargain retailers -- TJX Companies (NYSE: TJX), Costco Wholesale (NASDAQ: COST), and Dollar Tree (NASDAQ: DLTR) -- and see why they could be great ways to capitalize on that secular trend in 2025. 1. TJX Companies TJX Companies, the parent company of TJ Maxx, HomeGoods, HomeSense, Marshalls, and Sierra Trading Post, is the world's largest off-price retailer. It operates over 5,000 stores and six e-commerce sites across nine countries, and it sells its products at 20% to 60% lower prices than its full-price peers do. TJX buys up liquidated inventories from struggling retailers at rock-bottom prices. That strategy helped it expand throughout the retail apocalypse, even as bigger retailers collapsed. It also frequently rotates its products to drive return visits and "treasure hunts" at its stores. From its fiscal 2015 to fiscal 2025 (which ended this February), TJX's revenue grew at a CAGR of 7%. Its year-end store count increased by 50%, its gross profit margin expanded from 28.5% to 30.6%, and its earnings per share (EPS) rose at a CAGR of 3%. From fiscal 2025 to fiscal 2028, analysts expect its revenue and EPS to grow at CAGRs of 6% and 9%, respectively. That resilience makes TJX one of the simplest ways to profit from the expansion of the off-price market and the contraction of the full-price market. Its stock still looks reasonably valued at 28 times this year's earnings, and it pays a decent forward dividend yield of 1.3%. 2. Costco Wholesale Costco is the world's largest warehouse club retailer. It can afford to sell its products at much lower margins than full-price retailers because it generates most of its profits from its higher-margin membership fees. It can keep growing as long as it keeps expanding, gaining more cardholders, and locking them in as it gradually raises those fees. From its fiscal 2014 to fiscal 2024 (which ended last September), Costco's annual revenue and EPS rose at CAGRs of 8% and 14%, respectively. Its number of year-end warehouses grew from 663 to 891 as its number of cardholders increased from 76 million to 137 million. It maintained a healthy global renewal rate of 90.5% in its latest quarter. From fiscal 2024 to fiscal 2027, analysts expect Costco's revenue and EPS to increase at CAGRs of 8% and 10%, respectively. That growth should be driven by its domestic and overseas expansion, its robust e-commerce sales, and its rising membership fees. Costco only pays a forward yield of 0.6% -- and its stock might seem pricey at 47 times next year's earnings -- but its evergreen strengths justify that premium valuation. 3. Dollar Tree Dollar Tree, which acquired Family Dollar in 2015, is the second-largest dollar store retailer in the U.S. after Dollar General. It mainly serves urban and suburban shoppers, while Dollar General opens more stores in rural areas. From its fiscal 2014 to fiscal 2024 (which ended this February), Dollar Tree's number of year-end stores (including Family Dollar) more than tripled from 5,367 to 16,774 as its revenue increased at a CAGR of 14%. Yet Dollar Tree racked up net losses over the past two years as Family Dollar's weak sales offset the strength of its namesake banner. It tried to squeeze more value from the brand by opening "combo stores" under both banners, but that strategy didn't pay off. That's why it wasn't surprising when Dollar Tree finally divested all of its Family Dollar stores this year. By selling Family Dollar, Dollar Tree freed up a lot more cash to strengthen its namesake banner. It plans to renovate more of its stores, roll out its new tiered pricing strategy (which broadens its price range up to $7) across more locations, and attract higher-income shoppers. Analysts expect its revenue to decline 38% in fiscal 2025 as it sells Family Dollar, but they still see its revenue growing at a CAGR of 6% over the following two years. They also see its EPS turning positive again this year and growing at a CAGR of 13% through fiscal 2027. Its stock still looks reasonably valued at 21 times this year's earnings, and it could attract a lot more investors once it demonstrates that its newly streamlined business can keep growing. Don't miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $458,390!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $40,635!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $633,452!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon. *Stock Advisor returns as of July 29, 2025
CBC
28 minutes ago
- CBC
‘The RNC did not effectively manage its inventories or its employee training,' says AG report
The province's Auditor General says the RNC is failing to properly manage its inventory and employee training. As the CBC's Mark Quinn reports, the RNC is unable to say where all the confiscated items are, or if employees are getting the training they need.
