The battle between Palantir and Nvidia: Which AI stock is the better buy?
When it comes to investing in artificial intelligence (AI) stocks, Palantir and Nvidia stand out as two prominent choices. Palantir, a data mining and analytics company, serves government agencies and large enterprises by aggregating data for informed decision-making. On the other hand, Nvidia is a leading producer of GPUs, with a strong presence in the AI market for processing tasks.
In the past year, both Palantir and Nvidia have seen significant stock price increases, with Palantir growing by nearly 190% and Nvidia by more than 220%. Palantir’s stock initially soared after its IPO, but faced challenges due to revenue growth slowdowns. However, recent improvements in revenue growth and profitability have sparked renewed investor interest.
Looking ahead, Palantir expects its revenue to rise between 18% to 20% in 2024, with improved margins and continued profitability. Analysts predict a 32% growth in adjusted earnings for the year. While Palantir’s stock might still seem a bit pricey, it has shown signs of stabilization and growth potential.
On the other hand, Nvidia has continued to attract investors as a top player in the AI market. The company experienced a surge in revenue and adjusted EPS in fiscal 2024, driven by the demand for data center GPUs. Analysts project further growth in revenue and EPS for fiscal 2025, with Nvidia’s strong position in the generative AI market contributing to its success.
Looking at the bigger picture, while Palantir’s growth is stabilizing, it faces competition in the data analytics market, which impacts its stock valuation. In contrast, Nvidia offers a more enticing investment option with its competitive edge in the AI market and growth potential. With a focus on data center GPUs and the generative AI market, Nvidia appears to be a stronger long-term play in the AI sector compared to Palantir.
