Palantir and AST SpaceMobile: Analysts Predict Significant Downside Risks
By John Nada·Feb 17, 2026·4 min read
Analysts predict Palantir and AST SpaceMobile could decline by 62%, highlighting concerns over inflated tech stock valuations and retail investor dynamics.
Palantir Technologies and AST SpaceMobile, two high-flying stocks favored by retail investors, face potential declines of up to 62% according to select Wall Street analysts. This stark warning contrasts with the explosive returns these companies have delivered over the past three years, where Palantir has soared 1,630% and AST SpaceMobile 1,280% as of mid-February 2026. The divergence in outlook underscores the growing concern over inflated valuations within the tech sector. Roughly three decades ago, the advent and proliferation of the internet changed the business landscape forever.
This technological shift not only transformed the way businesses operate but also broke down information barriers that had existed between Wall Street and Main Street for more than a century. Retail investors, empowered by access to information and trading platforms, have increasingly participated in the stock market. This shift has allowed them to latch onto high-flying stocks, such as artificial intelligence (AI) data-mining specialist Palantir Technologies (NASDAQ: PLTR) and satellite-based cellular broadband services provider AST SpaceMobile (NASDAQ: ASTS). Palantir's impressive market cap growth, adding roughly $300 billion since the beginning of 2023, can be attributed to its strong performance in exceeding sales expectations.
The firm’s core platforms, Gotham and Foundry, serve critical roles for the U.S. government and businesses alike, leveraging AI and machine learning to provide data analysis and operational efficiency. Gotham is utilized by the U.S. government and its allies to plan and oversee military missions, as well as to collect and analyze data to protect against attacks and conduct criminal investigations.
On the other hand, Foundry is a subscription service designed to help businesses streamline their operations by better understanding their data. However, analysts like Rishi Jaluria from RBC Capital Markets question the sustainability of such high valuations. Jaluria, a longtime skeptic of Palantir’s stock price, notes that the company currently boasts a price-to-sales (P/S) ratio in the low triple digits, a figure that far exceeds the historical norms for megacap companies. Historically, companies at the forefront of next-big-thing trends have typically topped out at P/S ratios ranging from 30 to 45 over the past three decades.
This stark discrepancy raises questions about whether investors are paying an outsized premium for Palantir stock, and whether such valuations can be sustained in the long run. Despite Palantir's dominance in its niche, the warning from analysts raises questions about the broader implications for retail investors and market dynamics. Retail investors have increasingly become a significant force in the stock market, contributing to total equities trading volume. Their heavy investment in stocks with inflated valuations may pose systemic risks if corrections occur.
The tech sector's pronounced volatility could lead to significant shifts in capital flows, impacting overall market stability. As Palantir and AST SpaceMobile continue to capture the attention of retail investors, the cautionary notes from analysts serve as a critical reminder of the potential dangers associated with investing in high-flying stocks. With the tech sector experiencing pronounced fluctuations, there is a growing recognition that the current valuations may not accurately reflect the underlying fundamentals of these companies. As a result, investors are faced with a pivotal moment to reconsider the sustainability of tech stock valuations in the current economic climate.
AST SpaceMobile also shares some of these valuation concerns. As a provider of satellite-based cellular broadband services, the company has garnered significant interest from investors, particularly those looking to capitalize on the burgeoning potential of satellite technology and its application in global communication networks. However, analysts warn that the stock could also be vulnerable to significant corrections, similar to those predicted for Palantir. The interplay between retail investors, market dynamics, and stock valuations is complex.
The rise of the retail investor revolution, driven by the proliferation of information and trading technology, has fundamentally altered the landscape of equity trading. While the enthusiasm of retail investors has propelled the prices of stocks like Palantir and AST SpaceMobile to unprecedented heights, the caution from analysts emphasizes the importance of grounding investment decisions in fundamental analysis rather than market momentum alone. In a market characterized by volatility and uncertainty, the insights from Wall Street analysts may serve as a crucial barometer for retail investors navigating the complexities of stock selection. The allure of high returns must be balanced with an understanding of the potential risks associated with inflated valuations.
As the market continues to evolve, investors must remain vigilant and discerning, particularly in the tech sector where rapid advancements and changing dynamics can create both opportunities and pitfalls. Ultimately, the forecasts of potential declines for Palantir and AST SpaceMobile serve as a reminder that all investments carry risk. The exuberance surrounding these stocks highlights the need for investors to critically evaluate their portfolios and consider the long-term implications of their investment choices.