CoreWeave and Palantir Draw Meme Stock Comparisons as Shares Skyrocket

• CoreWeave Inc. (CRWV) and Palantir Technologies Inc. (PLTR) have surged nearly 400% and 460% respectively, driven by retail investor enthusiasm for AI, but their high valuations at 10 and 71 times projected sales raise concerns about sustainability, per a Bloomberg report.
• Despite strong revenue growth projections – CoreWeave doubling and Palantir up 36% – recent volatility, including CoreWeave’s 17% single-day drop, highlights the speculative risks in these AI-driven stocks.
• Retail trading activity is intense, with both stocks ranking high in client orders, but experts warn that ignoring fundamentals could lead to sharp corrections, as seen in past AI stock reversals like Super Micro Computer Inc. (SMCI).

The artificial intelligence (AI) sector has ignited a frenzy among investors, with CoreWeave Inc. (CRWV) and Palantir Technologies Inc. (PLTR) emerging as standout performers, drawing parallels to the meme stock phenomenon driven by retail trader enthusiasm. According to a Bloomberg report, CoreWeave has nearly quadrupled since its downsized initial public offering in March, while Palantir has surged more than 460% over the past year. These explosive gains reflect intense market interest in AI-driven companies, but they also raise questions about sustainability, as lofty valuations and speculative fervor invite comparisons to volatile meme stocks like GameStop Corp. (GME), which remains 66% below its 2021 peak.

CoreWeave, a cloud-computing provider renting GPU-accelerated capacity, counts Microsoft Corp. (MSFT) among its largest customers and has seen significant backing from Nvidia Corp. (NVDA), which disclosed a larger-than-expected stake in the company last month. CoreWeave’s revenue is projected to more than double this year, fueled by robust demand for AI infrastructure. However, its stock, priced at 10 times projected sales, reflects a premium far above the S&P 500 (SPX) average of 3 times. A recent 17% single-day drop, the largest on record for CoreWeave, underscores the stock’s volatility, though it quickly rebounded to near record highs the following session.

Palantir, known for its data analysis software serving government and commercial clients, has also capitalized on the AI boom. The company’s revenue is expected to grow 36% this year, driven by strong sales of its AI offerings and reportedly expanding U.S. government contracts under the Trump administration. Yet, its valuation at 71 times estimated sales makes it the priciest stock in the S&P 500, raising concerns about overvaluation. The high multiples for both companies suggest investors are prioritizing growth potential over immediate profitability, with CoreWeave reporting a $315 million net loss in the first quarter.

Bloomberg notes that retail investors have been a driving force behind these rallies, with data from Interactive Brokers Group indicating that CoreWeave and Palantir rank among the most actively traded stocks by client orders. Vanda Research notes a surge in retail activity, particularly in high-beta, speculative names like D-Wave Quantum Inc. (QBTS), which has risen 161% since May. This retail enthusiasm mirrors broader market trends, where AI-related stocks and riskier assets, including leveraged ETFs, dominate trading activity alongside established names like Nvidia and Tesla Inc. (TSLA). Marco Iachini of Vanda Research highlighted the “overwhelmingly positive” sentiment for stocks with strong momentum or AI exposure, signaling a speculative wave that could amplify volatility.

The AI trade’s resurgence reflects heavy spending by tech giants on computing infrastructure, positioning companies like CoreWeave and Palantir to benefit directly. CoreWeave’s expanded partnership with OpenAI and two lease agreements with Applied Digital Corp. (APLD) further bolster its growth outlook. However, the market’s exuberance carries risks, as evidenced by past AI-driven rallies that fizzled. Super Micro Computer Inc. (SMCI), for instance, quadrupled last year before losing over 80% of its value due to accounting issues. Similar reversals in BigBear.ai Holdings Inc. (BBAI) and SoundHound AI Inc. (SOUN) highlight the fragility of speculative AI trades.

Steve Sosnick, chief strategist at Interactive Brokers Group, cautioned that such trends require continuous inflows of new capital to remain sustainable, telling the publication that “Investors are ignoring fundamentals just to jump on the trend, and if you stretch a rubber band, the snapback can be substantial.” Gene Munster of Deepwater Asset Management echoed this sentiment, describing CoreWeave as “way, way overvalued” and warning that trading such stocks is “playing with fire.” While the AI sector’s long-term potential remains compelling, the current valuations and retail-driven momentum suggest a precarious balance between opportunity and risk. Investors chasing the next Nvidia may find themselves grappling with the volatility seen in GameStop’s trajectory if fundamentals fail to catch up with market enthusiasm.

Price Action: CoreWeave, with a $77.8 billion market cap, fell 6.36% to $151.80 on Tuesday, while Palantir, valued at $311.65 billion, slipped 0.70% to $131.13.

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