Key Points:
Nvidia Developments Growth Loopholes: The growth for Nvidia may seem appealing but low cost AI models coupled with high development expenses can affect future profitability.
Palantir Technologies Haul Road Overvaluation Reduction: Expanded competition for AI enabled selling analytics will mount a significant threat to Palantir’s existing overly rich stock value.
Tesla Inc Supercomputer Dojo Shifts: Underachieving Potential: Priced over the fair value bubbles pessimistic price adjustments may lie in the horizon.
OpenAI did produce a hell of a lot of spondulix with its 2022 ChatGPT product. That is more than two years on now and AI interest seems to be retracting. The focus of this piece is to look at those lucrative opportunities for Nvidia, Tesla, and Palantir Technologies if the existing AI enthusiasm shrinks in 2025 and beyond. Palantir Technologies and Tesla stock have been deluged with competition making things harder for them.
General Optimization Remotely allowing the AI to sit on walls may feel entertaining but there is a caveat to it. Primarily Palantir Technologies and Nvidia need to pack up and ship out do the heavy lifting now. Let’s consider Nvidia. So far the company has achieved an astonishing 421% growth in the last three years. By now, they are leading sellers of graphic processing units aka GPUs that make a necessity for training and running the most powerful algorithms ever devised.
Company-specific Analysis
1.Nvidia
Nvidia’s stock value increased by 421% in the last three years. This makes Nvidia one of the most recognizable symbols in the AI industry because it provides the GPUs needed to train and run sophisticated algorithms. The strong demand has enabled it to achieve a remarkable 94% increase in revenue in the third quarter of fiscal 2025, reaching $35.1 billion. However, there are some indicators that spending at this rate may not be possible in the long term.
Daron Acemoglu, a professor at MIT, argues that AI may never justify the costs for developing such advanced technologies due to its inability to solve complex problems. In addition, the emergence of cheap and open source LLMs such as DeepSeek from China could potentially hurt Nvidia’s clients by reducing their ability to profit from the substantial amount of GPU spending. Nevertheless, there is good news: even with Nvidia’s high growth rate, the company’s forward price to earnings ratio of 30 is lower than the 33 average of the Nasdaq-100 which indicates that some of the long-term uncertainties that Nvidia may encounter are already accounted for in the stock’s price and therefore, relative to many of it rivals, its shares may not be exposed to as great a downside risk.
2.Tesla
At first Tesla was popularly known as a car company. Now, however, Tesla is working hard to market itself as an AI company And has really started putting in money into building the Dojo, an AI supercomputer that supports the company’s autonomous driving strategy. If the strategy works, it could transform the company such that it makes more revenue from high margin SaaS products. However, there are doubts regarding how successful this transition shall be.
Even Elon Musk, Tesla’s CEO, has called Dojo a ”long shot” claiming it has the potential for great reward, but minimal chances of achieving it. The issue is that the market seems to be treating the AI transition as a fait accompli, and in truth, Tesla is still largely a automotive manufacturer. Their Automotive business ranges over 77% of their sales and they are facing stagnant demand issues. In the last quarter, the annual revenue for the company shrunk by 8%, coming in at $19.8 billion. Additionally, Tesla’s forward P/E ratio of 127 is nearly quadruple that of the Nasdaq-100 average and with such overwhelming growth rate, coupled with the uncertainty in their AI transition strategy, it’s clear the shares look extremely overvalued.
3.Palantir Technologies
Palantir Technologies has been enjoying the surge in popularity of AI, similarly to what Nvidia experienced, due to the immense growth in share value of 757% in the past three years. Palantir Technologies is an interesting company because it already has government and military contracts, so the potential for IF technology is tremendous. Still, while Palantir’s growth is impressive, the valuation of its stock appears to be out of line with reality.
Increased revenue during the fourth quarter Palantir gained over the year was $827.5 million which is a 36% growth compared to last year. This was facilitated heavily by US Commercials popularity in purchasing AI powered data analysis tools. Microsoft is not the only company to offer a platform like this. The cloud computing titan has its version, Fabric. What Palantir possesses that its competitors with massive resources cannot copy is still a mystery. Looking at forward P/E multiple, Palantirs 200 does not seem sensible after so much competition. Regardless, financial markets don’t exactly follow rationale in some instances, which is why the chance of Palantir being significantly overvalued becomes more plausible and, in turn, makes a drastic decline in stock price even more likely.
Conclusion
Due to the excitement surrounding AI, Nvidia, Tesla, and Palantir have seen profits, but as the hype dies down, these companies have potential risks. The competition in the AI market can prove to be difficult for Nvidia, while Tesla’s transition into an AI focused company is still unpredictable - making its stock overpriced. Even though Palantir is growing, it has stiff competition and its valuation is likely too high. All of these companies may face severe CHANGES to their stock prices as the attention around AI decreases.
Ranking
