Goldman Sachs' David Solomon Warns of Potential Market Drawdown Amid AI Frenzy

David Solomon, Chairman and CEO of Goldman Sachs, has cautioned investors about a potential market drawdown within the next 12-24 months due to over-exuberance in AI stocks. He drew parallels with the dotcom bubble, where enthusiasm and speculation led to unproven business models and significant losses for investors. Solomon believes that a reset in the market is inevitable, but the extent of the drawdown depends on how long the bull run lasts.

Palantir Technologies Inc. (PLTR) stock has been making significant strides in the market, with a notable surge in recent weeks. As of October 3, 2025, PLTR opened around $186.40 and is trading near $184–$185, down by approximately 1.4% from the previous day. Despite this modest pullback, the stock remains well above last year’s levels, having more than doubled year-to-date (YTD) by mid-2025 Palantir Stock Skyrockets on Boeing AI Partnership – Analysts Weigh In^[1].

The recent momentum can be attributed to several key developments. On September 23, Boeing Defense & Space announced it would integrate Palantir’s AI/data platform across its operations. Boeing’s defense chief hailed this partnership as “game-changing,” stating that it allows for faster decision-making processes Palantir Stock Skyrockets on Boeing AI Partnership – Analysts Weigh In^[1]. This news drove PLTR shares to jump by about 2% on the announcement.

Palantir also reported record second-quarter (Q2) results in early August 2025, with revenue reaching approximately $1.00 billion, a 48% year-over-year increase. The company raised its full-year revenue guidance to about $4.14–$4.15 billion, reflecting strong demand from both government and commercial sectors Palantir Stock Skyrockets on Boeing AI Partnership – Analysts Weigh In^[1]. This robust performance has been a significant driver of investor confidence.

Analysts remain divided on PLTR’s prospects. While some, such as Dan Ives of Wedbush, remain bullish on the company’s AI potential and have kept a Buy rating, others, like Gil Luria of DA Davidson, caution about near-term valuation Palantir Stock Skyrockets on Boeing AI Partnership – Analysts Weigh In^[1]. Price targets range widely, from as low as $45 to as high as $215, with the consensus target around $125–$140, implying limited upside from current levels Palantir Stock Skyrockets on Boeing AI Partnership – Analysts Weigh In^[1].

Palantir’s stock has outperformed many of its AI/software peers. By August, it was up by approximately 148% YTD, while C3.ai (stock “AI”) was down by about 51% Palantir Stock Skyrockets on Boeing AI Partnership – Analysts Weigh In^[1]. Snowflake (SNOW), another big data/AI company, also reported strong Q2 results, with its stock rising by about 20% after a blowout quarter, prompting Piper Sandler to raise its target to around $285 Palantir Stock Skyrockets on Boeing AI Partnership – Analysts Weigh In^[1].

Despite the recent pullback, Palantir’s stock remains close to its all-time highs. Technical indicators, such as the Relative Strength Index (RSI), have cooled off from extreme levels, suggesting that buyers have taken profits Palantir Stock Skyrockets on Boeing AI Partnership – Analysts Weigh In^[1]. However, the stock remains in an uptrend as long as it holds above roughly the $150 level.

Palantir’s share price has been driven by a series of recent news events. In July 2025, the U.S. Army announced a massive contract with Palantir, signaling deepening Pentagon reliance on the company’s tools. Additionally, Palantir has entered partnerships with Boeing and a nuclear energy company, expanding its footprint into new sectors Palantir Stock Skyrockets on Boeing AI Partnership – Analysts Weigh In^[1].

David Solomon, Chairman and CEO of Goldman Sachs, has recently cautioned investors about a potential market drawdown within the next 12-24 months due to over-exuberance in AI stocks. He drew parallels with the dotcom bubble, where enthusiasm and speculation led to significant losses for investors . Solomon believes that a reset in the market is inevitable, but the extent of the drawdown depends on how long the bull run lasts.

In conclusion, Palantir Technologies Inc. continues to perform strongly, driven by robust earnings, strategic partnerships, and expanding market reach. However, investors should remain vigilant given the potential for market corrections in the AI sector.

References
Palantir Stock Skyrockets on Boeing AI Partnership – Analysts Weigh In^[1] https://ts2.tech/en/palantir-stock-skyrockets-on-boeing-ai-partnership-analysts-weigh-in/
https://www.goldmansachs.com/news/articles/2025-09-12/goldman-sachs-cautions-investors-over-exuberance-in-ai-stocks.html