Popular artificial intelligence (AI) stocks Palantir and Arm may be headed for colossal losses.

Shares of Palantir Technologies ( PLTR -0.19% ) have returned 2,570% since the artificial intelligence (AI) boom began in earnest in January 2023. Arm Holdings ( ARM 2.14% ) did not go public until September 2023, but shares have since advanced 195%. Those gains have left both stocks trading at rich valuations, so much so that certain Wall Street analysts recommend selling.

Rishi Jaluria at RBC Capital has set a target price of $45 per share for Palantir. That implies 73% downside from its current share price of $171.

Javier Correonero at Morningstar has set a target price of $80 per share for Arm. That implies 46% downside from its current share price of $150.

Here's wha

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