In the mid-1990s, the proliferation of the internet kick-started a chain of events that would positively alter the long-term growth trajectory of corporate America. For three decades, investors have been waiting (often impatiently) for the next technological leap forward to take shape. The rise of artificial intelligence (AI) looks to have answered the call.
Providing software and systems with the necessary tools to make split-second decisions without human oversight is a game changer that the analysts at PwC foresee adding $15.7 trillion to global gross domestic product by 2030.
Image source: Getty Images.
However, not all Wall Street analysts share this over-the-top optimism. Although most price targets suggest the leading AI stocks will head higher in 2026, select Wall Street analysts believe three premier AI stocks can plunge by up to 96% in the new year.
Nvidia: Implied downside of 26%
Graphics processing unit (GPU) titan Nvidia (NVDA 2.09%) is the face of the AI revolution. Its GPUs are the undisputed top choice by businesses operating AI-accelerated data centers, and no external competitors are particularly close to rivaling Nvidia's hardware in terms of compute capabilities.
As of early January 2026, 64 Wall Street analysts have weighed in on Nvidia stock, with 60 viewing it as a buy or strong buy, three as the equivalent of a hold or market perform, and one with a sell rating. The lone wolf, with a $140 price target on Nvidia, implying downside of up to 26% in 2026 (equating to nearly $1.2 trillion in market cap), is Jay Goldberg at Seaport Research.
NASDAQ: NVDA
Key Data Points
Goldberg, who recently raised his firm's price target from $100 to $140 but maintained the sell rating, has been critical of slowing sequential data center revenue growth, CEO Jensen Huang's growth optimism for agentic AI, and Nvidia's sales potential in China. Geopolitical concerns have clouded the latter.
However, the biggest risk for Nvidia arguably comes from within. Although many of its core external competitors are rapidly ramping up their GPU production, it's Nvidia's top customers by net sales that threaten to hurt its future growth potential. Many of these leading customers are internally developing AI-GPUs or AI solutions to use in their data centers. Even though this internally developed hardware can't match Nvidia's GPUs on a compute basis, it's notably cheaper and readily available. In short, it can cost Nvidia valuable data center space.
Furthermore, every next-big-thing technology dating back to the advent of the internet has navigated its way through an early stage bubble. These bubbles form because investors regularly overestimate how quickly a new technology will be adopted, gain utility, and be optimized. Despite off-the-charts demand for data center infrastructure, businesses have yet to fully optimize AI as a technology. If an AI bubble were to form and burst in 2026, Nvidia stock could be clobbered.
Image source: Getty Images.
Palantir Technologies: Implied downside of 70%
Another premier AI stock, according to one Wall Street analyst, that can reverse course in 2026 is Palantir Technologies (PLTR 2.65%).
Palantir has been proving the naysayers wrong over the last three years. Shares of the company have catapulted higher by more than 2,500% thanks to its sustainable moat. Its AI- and machine learning-fueled Gotham and Foundry software-as-a-service (SaaS) platforms lack one-for-one replacements at scale. This means the multi-year government contracts Gotham secures, along with the subscriptions Foundry lands with businesses, yield predictable operating cash flow and sustainable double-digit sales growth.
But according to longtime Palantir bear Rishi Jaluria of RBC Capital, shares of the company are headed to $50. Mind you, Jaluria's price target was $11 in early 2025, so he's more than quadrupled his projected value for the company over the last year. Nevertheless, Jaluria's price target implies up to 70% downside this year.
NASDAQ: PLTR
Key Data Points
Jaluria has been particularly critical of Palantir's valuation, relative to other SaaS stocks. Whereas companies at the forefront of next-big-thing tech trends have regularly hit a ceiling at price-to-sales (P/S) ratios of 30 over the last three decades, Palantir shares closed out the previous weekend at a P/S ratio of 110! This hasn't been a sustainable premium at any point throughout history.
Additionally, Jaluria has been concerned about the long-term growth potential of Foundry, which is used by businesses to better understand their data and streamline their operations. RBC Capital's analyst has pointed to the personalization required of the platform for each subscriber, which could make scaling Foundry a challenge.
Tesla: Implied downside of 96%
However, the ultra-popular AI stock with the furthest to fall in 2026, based on the low-water price target of one Wall Street analyst, is electric-vehicle (EV) maker Tesla (TSLA +0.90%).
AI is at the heart of many of Tesla's growth ambitions. For instance, its full self-driving software (FSD) relies on AI to improve several safety features of its EVs. Artificial intelligence is also behind its robotaxi program, as well as its autonomous robot segment (known as Optimus).
NASDAQ: TSLA
Key Data Points
While Tesla has generated a profit for five consecutive years and has had success expanding into energy generation and storage, GLJ Research founder and analyst Gordon Johnson foresees shares plunging to $19.05. This very specific price target implies up to 96% downside in shares of Elon Musk's company.
Arguably, the leading issue with Tesla is that its CEO makes bold promises but often fails to deliver on them. Although Musk has overseen the launch of new EVs and achieved double-digit growth in energy generation and storage, his annual claims that Tesla would reach Level 5 FSD and put 1 million robotaxis on public roadways by 2020 were all wet. If Musk's laundry list of promises, including Optimus, were backed out of Tesla's valuation, the company's share price would presumably plummet.
Another concern is that Tesla is generating a significant percentage of its pre-tax income (often 40% to 60%) from unsustainable sources, such as regulatory tax credits and net interest income. A supposed growth stock trading at nearly 200 times forward-year earnings that's generating a lot of its income from unsustainable sources is a recipe for disaster.
