3 AI Stocks Crashed but I’m Only Buying ONE

The three biggest AI stocks in the world have just been absolutely crushed. One down 65% from its peak. Another surged more than 700% before suddenly rolling over. And a third lost almost 60% despite explosive growth. Everyone says buy the dip. But that is exactly [music] how investors get burned. Today we're breaking down all three and I'm going to reveal the only one I'm buying. I wanted to get Bridget from the Market Beat channel on for her insight what investors are telling her about these three stocks. Marketbee interviews some of the biggest names in investing and it's always a great resource for stock news. Bridget, thank you for coming here on the channel. I want to get right into it because this is a huge rollover in in the markets in that AI infrastructure play. What have you what are you seeing? What are you hearing from from your investors? What caused this recent sell-off in AI stocks? >> Now, this is all anyone is talking about right now. I I finished up about three interviews today alone and we talked about it in all three of them. this huge turnaround especially in the memory space. I think that's the standout pullback and turnaround in the market right now that people um are kind of shocked by because these memory stocks have really been leading the market and carrying the market with tremendous gains. For anybody who's been invested in this memory space, they know these have been the leaders in every portfolio. They still are. They're still up quite a bit from where they were a year ago, but the pullback of of roughly 30 to 35% in Micron is probably the standout one that most people are concerned about. So, I've I've heard a lot about that. And I think the thing that I'm hearing from multiple different analysts that we've interviewed on the show is the fundamentals are still there. Fundamentally, nothing has really changed to kind of spark this turnaround. Things are still the same. The demand is still there. Uh the backlogs are still there. It's just the market has kind of turned around. And one theory I heard from somebody today was that people are just taking profits. And it would be uh wild to not take some kind of profit off the table when you've had a, you know, 1,200 to 3,000% gain in a year. It's smart to take profits. And that as soon as the stock started to tumble, more and more people started to take profits. Do you think that has anything to do with it, Joseph? >> Well, absolutely. You're talking about Micron Micron up 700% plus in the last year. uh I would be taking profits and in fact I probably would have taken profits after doubling my money and would have missed out and kicking myself for it. What interests me really though is kind of the timeline of this sell off and and really the sell off in some of these stocks specifically. We have Palunteer down from October in that that really software AI fear. But much of the rest of the theme continued higher and we seem to have just hit a brick wall here in June just since June. So the last six weeks, Micron down 15%, Palunteer down 16%, Oracle getting crushed 48%. And then just the broader universe, the broader fund, the global X AIE ETF, that ticker AIQ, that's 80 80 plus companies in the space down 14% just in those six weeks. So it does seem to be something that is transitioning into a broader AI story. >> Yeah, absolutely. The downturn is more focused on these AI stocks, the same infrastructure names that you and I have both talked about on the channel. so many times that most of the analysts and guests that we have on MarketBe want to talk about these AI infrastructure stocks, uh the robotics automation stocks, the memory stocks, the chip makers, they've been carrying the market and again really leading to some crazy gains for investors over the last 12 to 18 months. So to see this pullback that doesn't really seem to have a clear signal, I think is the most the most interesting part about this AI turnaround. >> Sure. Well, let's dig into each of these individually. Palunteer, Oracle, and Micron. They're in three very different segments of AI, but I think they define the investing theme, and I'd like to think that there is an opportunity to buy the dip in at least one of these. First, we have Palunteer ticker PLTR. That's down 58% from its October 2025 peak, down 27% for this year. Now this is on the software side developing the AI powered platforms for government and business analysis just analyzing those massive data sets. The government still accounts for about 54% of its revenue. So very sticky revenue there. Uh commercial has grown immensely grown to 46% of that. What are you hearing as the bullcase for Palunteer? Uh and why why should investors be buying the dip in the stock? >> One of the bullcase was from the the CEO Alex Karp and what he had to say during an interview uh just a couple of weeks ago. He was basically questioning any company that's going to be using Anthropic or Open AI or any of these, you know, uh, chat agents within their company of a security risk that you are giving your data and your information and the ideas that are unique and proprietary to your company and you're putting those at risk by using these kinds of models versus using Palunteer software. And so in a bold case that one of our market beat analysts shared was basically talking about that's a that's a real moat for Palanteer is that any company any business and of course governments which is a huge part of Palanteer's business wants that security. They want to know that they can use AI but not give up their data and their information. And so I thought that was a really unique argument as a bullc case for why Palanteer will continue to grow even as these AI models become more relevant and more used in in all kinds of different companies. And so I think that's a good bullcase point. Um, another bullcase is that the data, the numbers coming in are showing Palanteer is still getting clients. They're still growing, especially that commercial side of the the company. They are growing. they have the numbers and the um subscriptions to back up the growth story. I do think on the bare side of it, the valuation piece of Palunteer is still always a concern and even our bull analyst will always talk about it and say yes valuation can still be a concern but long term they really do believe the growth story is there for Palanteer. >> Absolutely. And I do like that idea of Palunteer being the layer really between an enterprise and the uh the the models the the AI models right protecting that data. I also think Palunteer has a good case for orchestration of those agents. We're seeing a huge trend here in from token maxing, right? Companies uh spending as much as possible on AI and their agents uh no matter what the cost to really kind of value maxing it's being called and pulling back on that trying to spend efficiently and Palunteer sits right there with that orchestration of agents helping the agents or helping the enterprises find where to place those agents in which models to really find the best uh best bang for their buck. So I think it's got an undiscovered use for Palunteer in that in that bull case. Of course the bear case is that valuation. We have um some amazing amazing growth from Palunteer. Still I'm looking at 57% revenue growth expected this year. Um earnings growth of you know 363% over the last year. 38% uh margins on its profit. So very profitable, fast growing. But it's the it's the ratios here, the valuations here. Price to earnings ratio of 90 times. Okay? So, investors are paying $90 for every $1 in earnings uh across some of these other stocks, we'll see in the teens for for most other stocks, even even some of these growth stocks, especially after this dip. So I think that's the real the real bare case here is that even if Palunteer is able to uh to grow keep continue growing that revenue and the earnings if the multiples come down if investors continue to want to pay less for this stock maybe paying 30 times price to price to earnings. Hell those earnings could have tripled in that time and the stock would be at the same place if that multiple comes down to that point. Even the biggest Palanteer bulls that I've interviewed on our channel will also say that this valuation was crazy high at the the peaks that Palunteer stock saw and that this pullback is healthy is actually a good thing for the company and a good thing for the stock to help make the stock a little bit healthier. Um I know I hear from plenty of people in my comments. I'm sure the bow tie nation you hear from them too. Uh but the market beat community has lots of viewers who are very bullish on Palunteer and are expecting the stock to climb rapidly. But the analysts we speak to say the pullback is is actually a good thing for the stock. >> All right, bullish on Palunteer. We'll still see how it holds up against these other two. Now, one down even more. Oracle down 65% from its September surge to $366 that was in that massive shift to data center infrastructure compute and that leasing uh leasing strategy rebounded for a while but then crashed 48% just since this June. Now, Oracle has traditionally been in that more that software and database focused business, but just recently last year really went all in on that data center infrastructure play, the the picks and shovels and the compute leasing that worked out until it didn't and now it's coming back down. What are you hearing about the bull and the bear case for this? >> Well, we are hearing very vastly different things on our channel. I have had in the same week two analysts on and one will have a very bull case for Oracle and the very next day I have a different analyst who's saying avoid Oracle at all costs. This is the worst stock in the market. So opinions are very varied on this one and I think of of the three names we're talking about this one has the most variety of opinions. You have some really strong bull cases and really strong bare cases. I'm happy to share a little bit of what I'm hearing both. I'll start with that bull case. Um we have a market beat analyst who's very bullish on Oracle's future saying that the demand and the backlog is there for Oracle. Yes, they're spending a lot of money right now. Yes, the investment, the debt is huge, but he says that the the numbers are there to back up the spend that as soon as they build it, contracts come in that there are already that there's enough of a backlog for demand for what Oracle is building that they're going to be successful. and he thinks that the the sell-off is way overdone and that this is a great opportunity to get in on a a buy the dip opportunity on Oracle. Uh again, one very bullish analyst I spoke to said that this is going to be one of the best buy the dip opportunities of the year. >> Wow. Buy the dip opportunity of the year. That's a that's pretty strong. What about the bear case? What are you hearing on that? >> Uh the bear case completely opposite news is stay away from Oracle at all costs. This is the biggest falling knife. Don't do it. So completely different things. I frequently interview a Wall Street veteran Mark Chaken and over the last year he's come on the show two different times and talked about why he's such a bear on Oracle and he uh earlier on in the year gave a really bare case for Oracle when this stock was actually at one of its peaks and he said if you are in this stock now take some profits and run because it's going to go down and he was on just last week to say what I said was going to happen has happened in Oracle stock price um his prediction earlier on that the stock was going to go down has absolutely come true and he says he doesn't see it recovering anytime soon. He considers this one a really big risk and I I believe the thing that stuck out to me in that interview is he called it a massive bet on Open AI that so much of Oracle's contracts are all coming from Open AI and that uh we're starting to see some of that uh dissolving or maybe not showing the same strength. And so if that one bet on this huge client doesn't necessarily pay off for Oracle, then most [clears throat] of their revenue and business is gone. Um, that's just what he had to say. I'm not even sure about the the data on that, but that was one of his fears and concerns. Another concern he had was that so much of the stock is tied up in the CEO Ellison and um his risk associated with some other companies. And this was earlier on in the year when he was giving his bare case for Oracle was talking about his son's involvement in Paramount and whether that was going to impact um his cash flow availability. And I think that Ellison discussion is interesting because his net worth has been all over the place this year. At one point he had one of the highest net worths when Oracle was doing incredibly well and now you know he's lost something like $60 billion in net worth in the year as the stock price has plummeted so much. lost more in net worth than most of us will ever see in 10 lifetimes. Uh so a good a good timing on on that that bear call on Oracle. I would agree with a lot of that. I think that single customer risk in OpenAI especially after Open AAI kind of pushing back its IPO. So maybe some worries that the revenue uh isn't there to justify really the high price they're looking for in an IPO and and of course a lot of the Open AI uh a lot of Oracle's backlog is that OpenAI contract. So, we'll see there. Okay, moving on to the next one. Micron Technology, ticker MU. What are you hearing here about Micron Technology at that meteoric 700% run over the last year, now down 32% off of its June peak, Micron designs and manufacturers memory chips? One of the few chipmakers to actually do some manufacturing itself, including the DRAM, the ND flash, and is really boomed on that AI demand for the high bandwidth memory. What are people telling you here? >> Yeah, this is uh one that everyone has talked about, especially this week. This has been the story of the week to see the stling of the stock market to come down this much. Um, especially anybody who's been trading on those 2x the moves of of Micron. Those have moved a lot too. So, there's a couple of comments about that. But the main thing I'm hearing here is that it just appears to be profit taking. I know I just wrapped up an interview where they talked about the Korean company that's really the leader in this industry, SKH Heinix, um that they just IPOed in the US, but there's an analyst over in Korea that had a not so positive news on the growth story for them. And so I think that that is one potential factor that one of our guests mentioned as to why we're seeing this pullback, particularly in memory stocks. We also talked about SanDisk in that interview and all of them are down at kind of the same rates. You can see they've all lost a lot in just the last two weeks or so. Um, but kind of the same story that that's one small potential of why we're seeing this drop, but the main story we're hearing is it's likely just profit taking and that it's a good idea to take profits that nobody ever got broke taking profits and it's always wise to do that. As far as the fundamentals for Micron, they're still very much there. The demand is absolutely there if not growing even more. Um, one of the analysts I interviewed today uh cited another report that basically said analysts think that Micron is undervaluing itself. They think that they're they're not even estimating their potential growth and how much their revenue is going to grow enough because of increases that are likely to come in the cost of these because there is so much demand. The the simple supply and demand issue raising the price of these even more bringing in even more revenue. So, um I think that most people are still very very bullish on MU and think that this will be a very short-lived uh turnaround for the stock. Most interesting, Joseph, though, is the the idea that this low will probably only last until we see those hyperscalers earnings reports. That a lot of those hyperscaler big tech reports that are coming out in just a week or two uh are going to show just how much they're spending on Micron and these memory stocks and that we will likely see a catalyst then for for the stock to really turn around to the upside sooner rather than later because of earning season. >> Interesting. And I really like that that time-sensitive nature of this because yes, we did hear from IBM that uh in its you know massive loss it lost the most of it's ever lost on a single day 25% something like that on a single day because it's warning that a lot of its customers are pulling back on their software spending to be able to uh prioritize their spending towards the infrastructure and he specifically obviously pointed out uh you know high bandwidth memory and memory chips. So that could be something to watch in those hyperscaler earnings reports and and a boom for for Micron. So those hyperscalers would be Meta Platforms, that'd be Google or Alphabet GL, that would be um Amazon AMZN as well as u some of the other just large users and Oracle as well. Um I I love that that the bull case on this that they are, you know, years of of capacity booked out in advanced. Of course, the bare case is that that memory chips and really semiconductors in general have always been extremely cyclical. You know, they get these huge demand spikes from a technological advancement. Then they build out all this uh insane capacity and uh of course, you know, eventually the um the the the market the market evolves to to not need so much demand for the for the memory chips or or that demand comes down and and now they've got too much capacity. Yeah, that's one of the standout things from an interview I did too recently with Movie Navalier, who's a growth investor, is his platform. And he had a really great timeline of what he is looking at for how long Micron's growth story might last. And he said he thinks another 12 to 18 months of kind of this explosive growth. But after about 18 months, he is absolutely looking at taking some profits or starting to look at whether or at least starting to re-evaluate whether it's time to to take some profits off the table and get out of that stock because again very cyclical and that growth cycle will end eventually. It can't see that same meteoric growth forever and so that 12 to 18month timeline was his thought for how much longer the growth story or at least explosive growth story will continue. >> Interesting. So we have the the bullcase to the uh to the the second quarter earnings reports coming out soon over the next few weeks from from those hyperscalers. The bull case all the way through to maybe 12 to 18 months and then uh then a warning from that investor there. Now fundamentals couldn't be better for Micron. 110% revenue growth expected this year. That's after 166% revenue growth last year. Uh the margins have been un insane for this. 75% profit margin. EBITD margin for Micron that is well above uh I think the 5-year average is about 45% for this company. So it has been in this memory chip shortage it has been able to increase the price of its products so much that it is now uh producing a 75% profitability margin on that and and um actually this is pro this is one of the cheapest uh well this is the cheapest on our list of three stocks here. This is trading for 12 times a price toearnings basis. So that's trailing earnings if you believe in the the coming earnings forecast. Earnings expected up 181% over this uh over this next year. So 181% earnings expected. I know it's sometimes it's kind of hard to believe these numbers, but if you if you think Micron gets anywhere close to that, this stock is trading at just six times on a price to uh expected earnings basis. So very uh very cheap on that basis. I think that's what's so interesting about Micron's downturn right now is it's only a few weeks after that wild earnings report that was so good that you can't even believe some of these numbers and then the stock jumped to a new high but it only held it for about a day and then started this 30% pullback again after an explosive unbelievably good earnings report. >> So defying logic on the way up and on the way down. uh going headtohead here really uh comparing these three against each other because again I got to believe there's got to be a buy the dip opportunity in one of these returns haven't even been close though micron surging 638% over the last year starting to see the same weakness that's hit these others in the AI theme since late last year here in June um on the one-year chart here both Palunteer and Oracle are down 12% and 45% but could be ready for a rebound as far as the outlook Again, analysts expect Micron to continue at revenue bonanza, growing sales 110%, earnings up 180% this year. Uh, Palenter and Oracle though also expected to post some pretty respectable growth. Uh, Palunteer looking to book 57%, Oracle looking to book 31% revenue growth. So, kind of a big disconnect between the stock prices for these and that revenue outlook. Now, what surprised me most here was the profitability of the memory chip shortage has gotten so insane. We just talked about this. Micron has increased its prices so much. It's posting that 75% eBay margin. That is up from just 45% over the last over the last 5 years. So, it's really got the uh the pricing power over its uh over its customers here. Oracle's profit margin 45% slightly higher than its 41% average over the past 5 years. So, still some decent pricing power it has. Uh and then it's Palenter Palunteer that we see the big turnaround is margin of 38% there. for that profitability margin. It's been above the sector average and a huge improvement from the negative 3% margin it posted over the last 5 years. So just 5 years ago, Palunteer was deep in the red now posting a 38% uh EBITDA margin. Unfortunately, it is in valuation where that good news breaks down for Palunteer and has always been the sticking point for me. Even after the drop, investors are still paying that $90 for every dollar in earnings reported by the company. It's a 90 times price to earnings ratio and paying 60 times its sales. Now compare that to just 12 times price to earnings for Micron and 16 times for Oracle and just gets hard to buy Palunteer at that price. Even adjusting for the expected earnings growth, Micron looks like a steal at just 07 on that price to earnings to growth basis, the PEG basis. Oracle isn't bad at 0.58. But again, we have Palunteer at a very expensive 1.76 times. So, Bridget, what do you what do you say to to these uh to these three stocks? Which is the safer upside? Maybe which is the higher risk, higher return potential, and which one do you buy above all the rest? >> Well, I think it's an easy answer here of the best buy the dip opportunity, and I really think it's MU. I think that this is the pullback. It's kind of a gift of a pullback that investors have been waiting for. If you missed getting in on Micron and you've seen it grow this much, now is a great time to actually be looking at adding it. If you already own some, you can add some more. I think this is the best buy the dip opportunity based on all of those fundamental reasons you said. There are real earnings here. This the growth story is very real. Um there can be all kinds of hype and sentiment, but you can't fudge the numbers and a 75% profit margin can't be faked. It's real and there is still so much demand and that I don't see going away. I think this is a great opportunity to kind of get some of those gains pretty quickly in this stock. >> I agree. I think the uh the short term the near-term opportunity on Micron is very good with those hyperscaler earnings coming up. We are seeing no slowdown in the capital expenditures for those data centers for those that high bandwidth memory. In fact, we're seeing it accelerate and we're seeing those uh those companies those those infrastructure players accelerate or prioritize that spending to the memory chips away from software. So that would be a warning for some of those software names even for Palunteer once we see those uh those hyperscaler earnings come in. I think it is going to be a big upside potential for Micron and it's hard to hard seeing this stock get cheaper on a price toearnings basis. Okay, with that 180% expected earnings upside it is hard to see there there not being some very strong investor sentiment in this. Over the longer term, I would love to see Palunteer come down a little bit more. And I know Palunteer investors are going to hate me for saying that, but I'd love to see it come down a little bit more attractive valuation. I would be a buyer allin on Palunteer if it was down closer to 50 or 60 times price to earnings. I really do think Palunteer wins out in the long term on this software revolution in AI. I think it does a great job of acting as that layer between the enterprise users and the agents and those AI models. And I think that that's where it wins in the long term. It's just going to be a bumpy road in the meantime. >> Oh, I completely agree, Joseph. That's exactly my sentiment on Palunteer as well. Again, I'm not going from what analysts are saying, but just my personal impression of Palunteer is that this company does have long-term potential and it does have a lot of reasons to to be a long-term growth story, but where the price is right now, I just think expect volatility. I don't think this is a a slam dunk case of buy the dip because it could go lower. It could go higher, too. But I just think that volatility will be the story for this one for a for a few for a little while longer. Anyway, >> I want to thank Bridget of the Market Beat channel for her insight. I'm going to link to that channel below. Check it out for some great stock market news and analysis. Don't forget to join the community here on Let's Talk Money by tapping that subscribe button and clicking the bell notification.