Artificial intelligence (AI) revolution is transforming the tech landscape, and two early winners – Nvidia and Palantir Technologies – have seen their shares soar in recent times. Last year, Nvidia advanced 171% for the best performance in the Dow Jones Industrial Average, while Palantir surged 340% for the top performance in the S&P 500.
Both companies have reported record earnings thanks to demand from AI customers, and with today’s $200 billion AI market forecasted to grow to over $1 trillion by 2025, a lot more growth could be ahead. However, if you had to choose one, which one represents the better buy? Our analysis will help you decide.
Nvidia is the leading seller of graphics processing units (GPUs), powering key tasks like AI model training and inference. The company has become a one-stop shop for everything AI, with world’s biggest tech players, such as Meta Platforms and Microsoft, among its top customers. Nvidia’s latest release, Blackwell architecture, has exceeded supply, generating several billion dollars in revenue during its first quarter of commercialization.
In contrast, Palantir is a software company helping customers aggregate their data to make key decisions or automate workflows. The company’s Artificial Intelligence Platform (AIP) leverages AI, applying large language models to customers’ needs and transforming their use of their own data. Palantir has reported double-digit growth in revenue, with US commercial revenue expected to climb 54% this year to over $1 billion.
When considering valuation, Nvidia’s forward price-to-earnings ratio stands at 26 times, compared to 171 for Palantir. This valuation looks dirt cheap, making Nvidia the better buy currently.
Source: https://www.nasdaq.com/articles/better-ai-buy-right-now-nvidia-vs-palantir