Debating Between Core AI Stocks: Nvidia or Palantir Technologies - Which Performs Better?
In the rapidly evolving landscape of artificial intelligence (AI), two companies stand out as key players: Nvidia and Palantir Technologies. Each offers a unique proposition for investors, catering to different risk appetites and investment strategies.
Nvidia, a leading supplier of AI chips, has established itself as a powerhouse in the AI hardware sector. Its focus on building the computational engine, through products like the Blackwell Ultra architecture and DGX SuperPOD systems, places the company at the forefront of "agentic AI reasoning" - a crucial step towards the development of autonomous, intelligent systems [1]. Nvidia's steady growth and strong market position make it an appealing choice for long-term investors. Its recent rally has been bolstered by robust demand for its new Blackwell chip and solid earnings, reinforcing its dominant position in powering AI infrastructure like data centers and autonomous vehicles [1][2].
On the other hand, Palantir presents a higher-risk, higher-reward opportunity. The company specialises in AI-driven software solutions, particularly in government and enterprise sectors. Its rapid revenue growth (around 39% recently) and ambitious long-term revenue targets, aiming for $30 billion in revenue within six years if its AI platform (AIP) gains widespread adoption, underpin its potential [2][4]. Palantir's stock has surged recently due to contracts like a $795 million US Army deal, underscoring its AI applied analytics platform growth [3][4].
However, Palantir's valuation is very high — with multiples over 180 times earnings estimates — which introduces significant valuation risk. Its reliance on government contracts also adds sector concentration risk compared to Nvidia’s more diversified customer base [3][4].
Comparatively, Nvidia's valuation, while high, is supported by its market power. Trading at 46 times its trailing earnings, it is well below its five-year average P/E ratio of 78 [1]. Nvidia is generally regarded as the safer core holding in AI investing with less downside risk, while Palantir could deliver higher returns if its AI operating system becomes widely adopted but with greater uncertainty [1][2][3][4].
Investors seeking a solid core AI play may prefer Nvidia’s proven dominance, while those willing to accept more risk for potential outsized gains might consider Palantir. The global AI market, projected to surpass $826 billion by 2030, offers a vast opportunity for both companies [5].
References:
- Nvidia's Q1 fiscal 2026 revenue hits $44.1 billion, up 69% year over year
- Nvidia’s recent rally has been bolstered by robust demand for its new Blackwell chip and solid earnings
- Palantir's stock surges on $795 million US Army contract
- Palantir raises full-year 2025 guidance to $3.89 to $3.9 billion, representing projected annual growth of about 36% year over year
- Global AI market to surpass $826 billion by 2030, according to report
Finance and technology intertwine as Nvidia, a dominant player in AI hardware, captivates investors looking for long-term growth with its focus on "agentic AI reasoning" and exceptional market position. On the other hand, Palantir, renowned for its AI-driven software solutions, entices risk-takers with its rapid revenue growth and ambitious revenue targets, but carries higher valuation and sector concentration risks compared to Nvidia. Money may be made in both companies as the global AI market trajectory points towards a staggering $826 billion by 2030.
