Is Palantir the pin that pricks the AI bubble?

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

• Pets.com 2.0?
• Which road comes next?
• Substance of fluff?

If that’s enough to get the bubble bursting, or not, read on…

AI Collision 💥

Every bubble has its Pets.com. The flashy, overhyped, overvalued companies that define the mania on the way up and then collapse under their own weight of nothingnesss.

Pets.com, Webvan, eToys… those were the names that pricked the dot-com bubble in 2000.

The question that’s starting to bubble to the surface now… is the same thing happening today?

The bursting of the bubble in the 90s didn’t kill the internet.

It just cleared the decks.

The real winners, companies like Cisco (NASDAQ:CSCO), Oracle (NASDAQ:ORCL), Amazon (NASDAQ:AMZN), were the companies that built the foundations, and infrastructure of connectivity, cloud, and e-commerce. They became the giants of the next three decades because they weren’t all fluff, they had strong, tangible, growing businesses.

And they all rode out the dot-com bubble and smashed it for the next 30 years.

So the question now is, which names on the stock market are Pets.com, and which names are Cisco or Oracle?

That’s a big question, but when it comes to AI, that’s the significance of where we’re at. The next 30 years will be defined by AI. And companies that build out the infrastructure and connectivity and usefulness of it, will likely deliver the kinds of gains that Oracle, Amazon and Cisco have since the 90s.

And right now, no stock sits more precariously on that knife’s edge of are they Pets.com or are they Cisco, than Palantir (NASDAQ:PLTR).

Palantir has become one of the brightest success stories of the AI trade in 2025. Once a secretive government contractor said to be seeded by the CIA, best known for “black box” defence and intelligence software, it has ridden the wave of generative AI hype to a market cap that leaves even bulls scratching their heads.

Few investors actually understand Palantir’s business. They know it’s AI related, but they’re not really sure how.

The short version is they automate decision making. AI is used to do the work and make smarter data driven analytical decisions that humans could make.

That works very well on the battlefield, and equally in a boardroom.

Its financials are tangled up in opaque government contracts, experimental commercial platforms, and a promise that “our AI knows more than your AI.”

The result is a valuation that seems more about narrative than numbers, unless you view their future as the biggest contractor to the US (and Allied) defence organisations as continuing as is… and growing.

But when the market doesn’t know how to value you, the price swings can be brutal. Palantir has fallen heavily this past week, shaking investor confidence just as the AI hype cycle looked unstoppable.

Adding fuel to the fire, infamous short-seller Citron Research declared that even at $40 a share, Palantir would still be “too cheap.”

Normally that sort of reverse jab would send the stock into a long downfall, as Citron’s research has done previously. But I don’t think this is more than a speed bump for Palantir.

Also worth noting, Citron’s CEO Andrew Left is himself in hot water — currently facing SEC criminal charges for allegedly misleading followers and investors with his short-selling tactics.

The only certainty is that Palantir has a target on its back.

But this all comes as well at a time when Sam Altman, the man who practically embodies the AI boom, admitted that the AI market may be in a bubble.

He didn’t dance around it. He said hype is moving these stocks more than fundamentals.

So, when the sector’s own chief evangelist is calling out froth, and the sector’s star stock starts cracking, you can see why investors are getting nervous.

Now, Altman did also say AI would be the biggest era defining technology… but the headlines read “BUBBLE”.

So what happens next? Two paths present themselves.

One…

Palantir is the Pets.com of the AI cycle. A name that symbolized the boom, only to collapse and prick the wider bubble. If this is the beginning of the deflation, we’ll look back and say, “That was the moment.”

Two…

This is the proverbial bear trap. A deep misunderstanding of how big this AI boom is and will be is plaguing investors, particulary those who have sat on the sidelines doing nothing while stocks like Palantir double and triple in price.

That leads to sellers panicking, short sellers puffing their chests and headlines screaming “bubble bursting”… and then AI stocks rip higher again for years to come as demand for GPUs, data centers, and AI infrastructure roars on.

History suggests both outcomes are plausible.

After all, Amazon lost 90% of its value during the dot-com crash before becoming a trillion-dollar company. Cisco and Oracle crashed too yet remained foundational. But Pets.com never came back.

Which camp does Palantir fall into? That’s the trillion-dollar question.

My take, scenario two is more likely. Palantir has deep contracts, they have a growing company, they might look overvalued, but if you cast forward 30 years, they might look cheap.

Either way, the AI boom isn’t going away. The winners will build the infrastructure of the next thirty years. The losers will be remembered as the Pets.coms of the 2020s.

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What’s next for AI stocks?

After a bloodbath start to the year in which many of the AI darlings lost up to a third of their value… AI stocks have clawed back their losses. But now, with companies like Nvidia, TSMC and Microsoft all edging past their all time highs…

Former hedge fund manager James Altucher says it all lies in Executive Order 14179… which could change everything for the AI industry… and unleash a $15.7 trillion AI boom that dwarfs everything we’ve seen before.

Click here to see what’s playing out and how you could profit.

Capital at risk

Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

Boom 📈

• Tower Semiconductor (NASDAQ:TSEM) up 6%
• Intel (NASDAQ:INTC) up 5%
• IBM (NYSE:IBM) up 1%

Bust 📉

• Palantir (NASDAQ:PLTR) down 15%
• AMD (NASDAQ:AMD) down 10%
• Rambus Inc (NASDAQ:RMBS) down 9%

From the hive mind 🧠

• Google is busting it’s backside to get AI phones in the hands of as many consumers as it can before Apple does it better. And the new Pixel 10 is their latest (and best) effort yet.
• While they’re fighting off Apple in the AI phone market, they’re also competing hard with Amazon on the “home assistant” market too. Gemini might be more AI-heavy than Alexa, but Amazon’s devices are better than Nest. So the question is, for the home AI market, what comes first, the better device or the better AI? The answer wins the market.
• Just when you thought that Grok’s “Ani” companion was overly sexualised as it was… Elon decided that more was needed. So now she has a whole new set of outfits.

Artificial Polltelligence 🗳️

Weirdest AI image of the day

ChatGPT’s random quote of the day

Thanks for reading, and don’t forget to leave comments and questions below,

Sam Volkering

Editor-in-Chief

AI Collision