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Stocks like BigBear.AI are ones to avoid, no matter how much the price falls.
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Palantir is a solid company, but it remains overvalued.
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Reasonably priced stocks like Amazon are great AI companies to buy and hold for the long term.
Anyone who has purchased stocks related to artificial intelligence (AI) a few years ago, it’s pretty good today. Anyone who’s been left on the sidelines is probably experiencing the fear of missing out, otherwise known as FOMO. It can be hard to sit still when it feels like everyone else is getting rich, and you’re not.
Many readers are likely looking at AI stocks as the end of 2025 approaches and wondering if there are still gains to be had. Can you still buy AI stock today? The answer might surprise you. It’s more complicated than a simple yes or no answer because most of it takes place in the world of stocks.
One tip all investors should learn is to avoid nonsense companies that are simply using the hype around AI to promote their stocks. These are typically companies that put AI in their name or ticker, but whose businesses are struggling.
For example, there is BigBear.AI. If you don’t know what this name means, you’re not alone. It is a company that provides organizations with AI-based decision-making software, similar to Palantir Technologies do.
Last quarter, BigBear.AI’s revenue declined 20% year over year to $33.1 million. Ask yourself how a company that is supposed to benefit from hundreds of billions of dollars spent on AI is experiencing a decline in revenue. It generates minimal sales, has low margins and negative cash flow. This is a stock that is sure to disappoint any investor buying today.
If you are to completely ignore companies built solely on AI hype, then the next level of AI action is viable companies with less magnanimity. evaluations.
Take the previously mentioned Palantir. This is a phenomenal company that dominates AI software for business analytics. Its turnover grew by 63% year-on-year with an operating margin of 33%. Total revenue is nearly $4 billion, with U.S. commercial revenue growing more than 100% year-over-year last quarter.
The problem ? Palantir currently trades at a market cap of $433 billion. This makes the stock extremely overvalued relative to its future potential, even if it maintains this impressive level of compound earnings. Keep stocks like Palantir on your watchlist for now. Strike if they crash in 2026.
When looking at AI stocks, don’t worry about whether the entire sector will rise in 2026. This amounts to focusing on too broad a group of companies with too short a time horizon. Instead of wondering if AI stocks are a buy right now, you should look at specific stocks with strong growth prospects and trading at a reasonable price that you can hold for a decade.
