The stock also benefited significantly from a bullish report from Wedbush analyst Dan Ives, who raised the company's target price from $10 to $22. Palantir Technologies' (NASDAQ: PLTR) stock posted remarkable gains of almost 385% in 2024,

Another reason the AI bubble can burst in 2025 is due to the expected resolution of GPU scarcity that's sent Nvidia's stock into the stratosphere.

Year to date, shares of Palantir Technologies (NASDAQ: PLTR) have soared by 326% while shares of Adobe (NASDAQ: ADBE) have tanked by 20%. However, picking a stock based largely on its recent performance is a strategy fraught with risks. Past returns are not predictive of the growth potential of a stock.

One of the prominent stocks driven by artificial intelligence (AI) is Palantir Technologies (NASDAQ: PLTR). From a low of around $6 per share at the height of the 2022 bear market, the SaaS stock's AI tools have driven a more than 12-fold gain in the stock in two years.