Megan Whitley
Nasdaq-100’s Top 3 Rocket Stocks of 2025: Why Experts Warn to Sell (Except This One)
Find out why Wall Street thinks two of the Nasdaq-100’s biggest gainers may tumble—while one star stock could take off even higher.
- Palantir stock soared 69% YTD—analysts see 21% downside ahead.
- Zscaler climbed 68% YTD—but faces a pricey 93x earnings multiple.
- MercadoLibre up 46% YTD—with 15% more upside forecasted.
Investors riding the Nasdaq-100 high in 2025 have seen jaw-dropping gains in Palantir Technologies, Zscaler, and MercadoLibre. But with every surge comes a warning—analysts now predict turbulence ahead for two of these red-hot stocks, and a potential buying opportunity for one. What’s fueling the rally, and should investors cash out or double down? Here’s the breakdown.
Q: Why Are Palantir, Zscaler, and MercadoLibre Surging?
These three titans delivered head-turning growth in the first half of 2025. Palantir jumped on the back of red-hot demand for artificial intelligence, Zscaler rode the wave of cloud security upgrades, and MercadoLibre continued its dominance of Latin American e-commerce—each posting strong quarterly results and robust guidance for the year ahead.
Market enthusiasm—and mega trends like AI adoption and digital commerce—sent their stock prices into orbit. But stock prices can outpace fundamentals, and Wall Street’s forecasts now tell a different story for each.
Q: Is Palantir’s 69% Rally Setting Up a Fall?
Palantir’s AI platform has become the software of choice for governments and Fortune 500 companies alike. The company pulled in $884 million in Q1, a 39% jump for the seventh consecutive quarter of accelerating revenue, and non-GAAP earnings exploded 62%.
Industry heavyweights—IDC and Forrester—recently awarded Palantir top marks in both decision intelligence and AI/machine learning. CEO guidance was bullish, with accelerated revenue targets for 2025 and a strategy built around AI momentum. Yet here’s the catch: Palantir’s valuation is sky-high. It’s the priciest software stock by forward price-to-sales, and experts warn that even if growth holds at 40%+ for the next five years, it could stay wildly overvalued. Wall Street now pegs its median price target 21% below the current stock price, suggesting holders may want to trim or exit positions.
Q: What About Zscaler—Should Investors Hang On?
Zscaler’s innovations in cloud network security have seen it become the backbone of zero trust architecture for major corporations. With a $96 billion serviceable market and back-to-back leadership plaques from Gartner, the company looks better than ever on paper. Latest quarterly results impressed with a 23% revenue spike and management dialing up bullish guidance for the rest of 2025.
But when the buzz clears, Zscaler’s stock looks steep at 93 times earnings. Even with the company outperforming estimates over the past six quarters, analysts now see near-zero upside ahead and warn competitive pressures could slow future profitability. If you’re holding, this could be a time to tread cautiously, as the growth story may already be priced in.
How To Spot a Genuine Winner: MercadoLibre’s 2025 Playbook
Unlike its Nasdaq-100 counterparts, MercadoLibre looks primed for more gains. The “Amazon of Latin America” controls nearly a third of the region’s e-commerce, has built the fastest delivery network in LATAM, and continues to expand its fintech and advertising arms.
Latest earnings showed a 37% surge in revenue—fintech especially leading the charge—and net income up 44%. Analysts see MercadoLibre’s earnings growing at 36% per year into 2026, while the stock still trades at a relatively reasonable multiple for the growth. Wall Street’s median price target forecasts 15% more upside—a bullish sign for those weighing a buy.
For investors searching for more global tech insight, sites like Reuters and CNBC offer up-to-the-minute market coverage.
FAQs: What Should Investors Do Next?
- Q: Should I sell Palantir now?
A: With analysts forecasting a notable drop from current prices, it may be time to reduce or exit positions unless you’re confident in long-term hypergrowth. - Q: Is Zscaler a hold or a sell for 2025?
A: The outlook is mixed. Growth remains strong, but high valuation and minimal upside suggest caution or profit-taking. - Q: Can MercadoLibre keep climbing?
A: Wall Street believes so, citing robust growth across retail and fintech and a reasonable valuation for long-term investors.
How to Use Analyst Targets in Your Portfolio
Always compare analyst target prices with your own investment horizons. While analyst consensus offers direction, long-term winners can defy short-term skepticism. Watch market trends, earnings surprises, and valuation shifts closely—especially in volatile tech-driven names. Staying informed via reputable resources like Bloomberg and Financial Times is crucial for nimble investors.
Bottom Line: Don’t Let Hype Cloud Judgment—Act on Smart Signals
- Check analyst targets before adding or trimming big winners.
- Rebalance overvalued positions, like Palantir and Zscaler, as risk rises.
- Consider MercadoLibre for exposure to fast-growing LATAM e-commerce and fintech.
- Monitor upcoming earnings and analyst commentary for all three stocks.
Stay decisive. Make this the year you outsmart the market, not just ride it!
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