Fundamentally, artificial intelligence involves software and systems performing tasks that are typically carried out by humans, with exceptional capabilities to learn and improve without human intervention.
This adaptability makes artificial intelligence a potential key innovation across all sectors of the US and global economy.
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Forecast: S&P 500 index may rise 5% in 100 years
PwC’s forecast emphasizes the enormous potential of artificial intelligence, predicting a $15.7 trillion increase in global economic output by 2030, with productivity gains of $6.6 trillion and consumer benefits of $9.1 trillion. Wall Street is taking note, with many institutions and analysts having high growth expectations and price targets for leading AI stocks. However, some analysts remain skeptical.
Here are three top artificial intelligence stocks that Wall Street analysts say could see significant declines:
Palantir Technologies: Potential drop of 65% –
Data mining expert Palantir Technologies (NYSE: PLTR) is one of the stocks expected to see a large decline. While some analysts expect earnings per share to rise by 35%, RBC Capital’s Rishi Jhaluria predicts a 65% drop to $9 per share, citing concerns about the sustainability of special purpose acquisition company (SPAC) earnings. Despite strong government contracts and business growth for Palantir, high valuations pose risks to an already expensive stock market.
Nvidia: Potential drop of 22% –
Technology giant Nvidia (NASDAQ: NVDA), benefiting from the AI revolution, may also suffer a decline. Deutsche Bank’s Ross Seymour has set a target price of $100 per share, indicating a 22% drop. Although Nvidia’s GPU dominates the AI market, history shows that early innovation often faces bubbles and corrections. In addition, competitive pressures and expected declines in gross margins suggest potential challenges in the future.
Tesla: Potential drop of 91% –
Gordon Johnson of GLJ Research states that Tesla (NASDAQ: TSLA), known for integrating AI into fully autonomous driving software, faces the greatest risk, with the stock expected to plunge by 91% to $22.86. Despite remarkable growth and profitability under CEO Elon Musk, continuous price reductions for electric vehicles, competition, and weakness in non-automotive businesses indicate trouble. With shrinking profit margins and delivery volumes, Tesla’s stock may be significantly overvalued.
These forecasts highlight the volatility and high risks in the artificial intelligence stock market, emphasizing the importance of cautious and strategic investment approaches.
