Roughly three decades ago, the advent and proliferation of the internet changed the business landscape forever. But just as important, the internet broke down information barriers that had existed between Wall Street and Main Street for more than a century. In other words, this breakthrough technology gave rise to the retail investor revolution.
Retail investors are playing a larger role in total equities trading volume over time. They've also latched onto some of Wall Street's highest-flying stocks, including artificial intelligence (AI) data-mining specialist Palantir Technologies (PLTR +1.69%) and satellite-based cellular broadband services provider AST SpaceMobile (ASTS 0.24%).
Although both of these beloved stocks have delivered outsize returns over the trailing three years -- Palantir and AST SpaceMobile have soared 1,630% and 1,280%, respectively, as of Feb. 13, 2026 -- not everyone on Wall Street shares the same vision as retail investors. According to select Wall Street analysts, this dynamic duo could plunge as much as 62% in 2026.
Image source: Getty Images.
Palantir Technologies: Implied downside of 62%
Palantir didn't add roughly $300 billion in market cap since the beginning of 2023 by accident. It's the result of consistently blowing past the consensus sales expectations of analysts and investors recognizing the company offers a sustainable moat.
Its core operating platforms, Gotham and Foundry, have no large-scale competitors. The U.S. government and its allies use Gotham to plan and oversee military missions, as well as to collect and analyze data to protect against attacks and conduct criminal investigations. Meanwhile, Foundry is a subscription service designed to help businesses streamline their operations by better understanding their data. Both of these software-as-a-service platforms are AI- and machine-learning-driven.
While companies with sustainable moats typically command a valuation premium, there's only so far this premium can be stretched.
NASDAQ: PLTR
Key Data Points
According to RBC Capital Markets analyst Rishi Jaluria, Palantir stock can head to $50 per share. This would equate to 62% downside from where shares ended on Feb. 13.
Jaluria, a longtime Palantir bear, continues to question why investors are paying such an outsize premium for the stock. History tells us that megacap companies at the forefront of next-big-thing trends have consistently topped out at price-to-sales (P/S) ratios ranging from 30 to 45 over the last three decades. Palantir headed into its latest earnings report with a P/S ratio in the low triple digits. No earnings beat or revenue guide increase would have been sufficient to justify such a premium.
Jaluria has also been particularly critical of Palantir's newer segment, Foundry. Jaluria has opined that the customization required of Foundry to satisfy new clients will make scaling this segment extremely challenging.
Lastly, Palantir would be exposed if history repeats and an AI bubble forms and subsequently bursts. Every game-changing innovation over the last three decades has eventually navigated a bubble-bursting event. Although AI adoption hasn't been a problem, as evidenced by enterprise spending on AI infrastructure, we still look to be years away from this technology optimizing sales and profits for businesses investing in it.
Image source: Getty Images.
AST SpaceMobile: Implied downside of 48%
The other high-flying stock retail investors love that may get absolutely walloped in 2026 is AST SpaceMobile.
Similar to Palantir, AST SpaceMobile shares have skyrocketed on the belief that it possesses a sustainable first-mover advantage/competitive moat. While other companies have previously attempted to launch satellite-based cellular broadband services, these prior efforts required expensive handsets compatible with satellite technology. AST's BlueBird satellites can work with existing smartphones to provide global 4G and 5G cellular broadband service.
The other differentiating factor for AST SpaceMobile is that it's partnering with, rather than competing against, the world's largest wireless operators. Whereas companies that had previously launched satellite networks were competing against traditional wireless carriers, AST has partnered with more than 50 mobile network operators that collectively serve nearly 6 billion combined subscribers worldwide.
NASDAQ: ASTS
Key Data Points
Despite this distinction and the potential for truly parabolic sales growth for the foreseeable future, one Wall Street analyst believes AST SpaceMobile will lose close to half of its value. UBS analyst Christopher Schoell has a price target of just $43 on AST, implying downside potential of 48% based on the company's Feb. 13 closing price.
The catalyst behind Schoell's Street-low price target was the $19 billion acquisition of EchoStar's S-Band spectrum by SpaceX-owned Starlink. Schoell believes this deal strengthens Starlink's foundation and will increase competitive pressure on AST.
However, this isn't the only potential problem for AST SpaceMobile. Its lightning-fast growth rate is dependent on the company launching new satellites in a timely and cost-effective manner. It's unlikely that this ramp-up in production will occur without a hitch. Any production snafus or inflationary pressures could hit AST stock hard.
The final concern has to do with AST SpaceMobile's valuation. Even with a parabolic sales growth forecast, AST is valued at 10 times forecast revenue in 2029. It would appear that AST has been priced for perfection in an imperfect industry.
