The bull market looks to be in full force as valuations continue to rise higher for many stocks. That increases the chance that investors who continue to chase stocks at their highs could end up holding the bag later on if a correction occurs. There are many stocks out there right now with valuations that look to be in speculative territory. At these levels of valuation, it has become nearly impossible to justify their price tags.

Three of these hot stocks that investors should be extra careful about these days are MicroStrategy (MSTR -3.24%), Palantir Technologies (PLTR -3.72%), and CrowdStrike (CRWD -2.76%). Although they have generated some fantastic returns for investors, you may want to consider taking a second look at these stocks before deciding to invest in them, as their valuations are at absurdly high levels.

1. MicroStrategy

MicroStrategy has benefited from the rally in cryptocurrencies this year, with Bitcoin reaching record levels. The company is raising money in order to buy more Bitcoins, and while that can win over crypto investors in the process and lead to more excitement, it also means there's more risk with the stock.

There's little sense in trying to justify MicroStrategy's valuation because, at more than 4,000 times its trailing earnings, it's clear that investors are treating this as more of a cryptocurrency than your average growth stock. MicroStrategy's market cap is around $90 billion, which is astounding when you consider that the business has generated less than $500 million in sales over the trailing 12 months. This is a largely speculative stock to own, and while it is technically involved with providing business intelligence solutions to companies, it's the crypto avenue that is driving up the share price these days.

Year to date, the stock price is up over 513% as of November. But before you consider buying MicroStrategy stock, you should be aware that it will likely rise and fall along with Bitcoin. And if you aren't prepared for that potential roller-coaster ride, you may be better off sitting on the sidelines than buying shares of MicroStrategy.

2. Palantir Technologies

Palantir's 307%-plus gains so far this year almost look modest when compared to MicroStrategy, but this, too, is another highly expensive investment to add to your portfolio today. The good news is the company looks to be heading in the right direction in growing its sales and profits, and it's likely to join the Nasdaq-100 in the near future, given its massive $150 billion market cap.

But even if that does happen, it may still only be a matter of time before investors pull the brakes on the data analytics company. Although artificial intelligence (AI) has unlocked new growth opportunities for the business, the stock trades at 145 times next year's estimated earnings -- an obscene valuation for any growth stock.

There's no metric based on fundamentals that can help justify Palantir's stock price today, which is why this has also become a highly speculative buy at this point. While its valuation isn't as outlandish as MicroStrategy's is, investors who buy Palantir at its current levels may also face the risk of a significant correction in the near future.

3. CrowdStrike

Cybersecurity company CrowdStrike has largely recovered from the massive data outage that occurred back in July and soured investors on this tech stock. For a while, it looked like the stock might be in trouble as fears mounted that it would lose the trust of its customers due to the incident.

The company, however, appears to have put many of those fears to rest with its latest results, which saw its annual recurring revenue top $4 billion for the period ending Oct. 31. During the period, it also hit $1 billion in quarterly revenue, which was an increase of 29% year over year.

The stock isn't back to its all-time high, at least not yet. But with investors paying 80 times next year's earnings, it's clear that speculation is playing a big part in the reason why its share price is as high as it is; many investors see this as a top AI stock to own, which can benefit from continued growth opportunities due to emerging AI-related cybersecurity threats.

And while that may be the case, there are many cybersecurity options out there and competitors to consider. It's hard to justify such a high multiple for CrowdStrike, and investors who invest in the business shouldn't overlook that because, at such a steep premium, you're already paying for a lot of future growth and not leaving much, if any, real margin of safety should the business struggle.