Executive Summary
- Financial analyst David Jagielski advises caution regarding Palantir Technologies, Rigetti Computing, and Oklo, citing their “absurdly high valuations” as a significant risk that could limit future returns for investors.
- Jagielski emphasizes that buying stocks at elevated levels introduces substantial risk, illustrating this with Microsoft’s dot-com era performance, and recommends focusing on more reasonably priced growth opportunities.
- Specific concerns for the highlighted stocks include Palantir’s P/E multiple over 600, Rigetti Computing’s unprofitability and trading at over 1,100 times minimal revenue, and Oklo’s $20 billion market capitalization with no current revenue and no revenue anticipated until late 2027.
The Story So Far
- The current warnings regarding rapidly growing technology stocks like Palantir, Rigetti, and Oklo are primarily due to their “absurdly high valuations” driven by speculative enthusiasm for AI and quantum computing. These valuations are not supported by the companies’ current fundamentals, such as profitability or revenue generation, leading to concerns about potential significant downside if investor sentiment shifts, as seen in past market corrections.
Why This Matters
- Financial analysts are cautioning investors about the significant risks associated with buying rapidly growing technology stocks like Palantir Technologies, Rigetti Computing, and Oklo due to their “absurdly high valuations.” Despite recent impressive gains, these companies’ prices are largely driven by speculative hype around AI and other emerging technologies rather than current profitability or substantial revenue, potentially setting up new investors for limited future returns or significant losses if market sentiment shifts or ambitious future projections fail to materialize.
Who Thinks What?
- David Jagielski, a financial analyst, advises investors to exercise caution regarding Palantir Technologies, Rigetti Computing, and Oklo, citing their “absurdly high valuations” and potential for significant downside, recommending a focus on more reasonably priced growth opportunities instead.
- Investors, driven by hype around AI and quantum computing, have pushed the valuations of Palantir Technologies, Rigetti Computing, and Oklo to extremely high levels, despite concerns about profitability, minimal revenue, or the long-term returns from AI investments.
David Jagielski, a financial analyst writing for The Motley Fool on November 1, 2025, advises investors to exercise caution regarding three rapidly growing technology stocks—Palantir Technologies, Rigetti Computing, and Oklo—citing their “absurdly high valuations” as a significant risk. Jagielski suggests that despite their recent impressive gains, these companies may be trading at inflated prices, potentially limiting future returns for new investors.
Valuation Concerns
Jagielski emphasizes that considering a stock’s valuation is crucial before making investment decisions, warning that buying at elevated levels can introduce significant risk to a portfolio. He illustrates this point with Microsoft, noting that an investment made in January 2000, prior to the dot-com bubble crash, would have yielded a lower return by November 2025 compared to an investment made 16 years later.
While not advocating for market timing, the analyst suggests that avoiding highly priced stocks can be a prudent strategy, recommending instead a focus on more reasonably priced growth opportunities. The three specific stocks highlighted for their “grossly inflated valuations” are Palantir Technologies, Rigetti Computing, and Oklo.
Palantir Technologies
Palantir Technologies, a data analytics company specializing in AI platforms for government and commercial clients, holds a market capitalization of $450 billion. Despite generating strong growth, Jagielski points to its price-to-earnings (P/E) multiple of over 600, with a forward P/E multiple still exceeding 200 based on analyst expectations for the coming year.
Concerns also arise from potential slowdowns in AI-related spending, with a recent MIT study indicating that 95% of businesses are not seeing substantial returns from their AI investments. Given its high valuation, Palantir’s stock could face significant downside if AI spending enthusiasm wanes.
Rigetti Computing
Rigetti Computing has seen its stock surge by more than 3,200% over the past 12 months, fueled by hype around quantum computing. The company, with a market capitalization of $13 billion, is highlighted as a particularly risky investment due to its unprofitability and minimal revenue, having generated less than $8 million in revenue over the last 12 months.
The stock currently trades at more than 1,100 times its revenue. Rigetti’s shares previously crashed in 2023, falling below $1 from highs above $10, when investor sentiment cooled on quantum computing. The analyst warns that a slight shift in investor sentiment could lead to another significant decline.
Oklo
Oklo is presented as potentially the most egregiously priced among the three, with a market capitalization of approximately $20 billion despite having no revenue on its books. Its stock has skyrocketed over 600% in the past year, driven by AI-related hype and the expectation that it could utilize nuclear waste as fuel to address surging energy demands.
Analysts do not anticipate Oklo to begin generating revenue until the end of 2027. Jagielski characterizes investing in Oklo at its current valuation as more of a gamble than an investment, suggesting a wait-and-see approach given the significant uncertainties surrounding its business model.
Key Takeaways
The analysis underscores the critical role of valuation in investment decisions, particularly for companies experiencing rapid growth driven by speculative excitement. Investors are advised to carefully consider a company’s fundamentals and future prospects against its current market price to avoid the risks associated with highly inflated valuations.
