Palantir Technologies-Better Artificial Intelligence (AI) Stock: Nvidia vs. Palantir

Core Viewpoint - Nvidia and Palantir Technologies experienced significant gains in 2024 due to the rising demand for AI solutions, but 2025 has shown a decline in their stock performance, with Nvidia down nearly 14% and Palantir losing ground despite a strong start [1][2]. Nvidia - Nvidia's revenue for Q4 fiscal 2025 reached a record $39.3 billion, marking a 78% year-over-year increase, with adjusted earnings rising 71% to$ 0.89 per share, surpassing Wall Street expectations [5]. - The company anticipates $43 billion in revenue for the current quarter, representing a 65% increase from the previous year, driven by the ramp-up of its Blackwell processors [6]. - Nvidia's Blackwell architecture is expected to maintain its dominant market share of around 85% in the AI chip market, processing requests 25 times faster at a 20 times lower cost compared to the previous generation [7]. - Analysts have raised revenue growth expectations for Nvidia for the current and next two fiscal years, with earnings projected to increase by 50% in the current fiscal year [8][9]. - Nvidia's adjusted gross margin is expected to return to the mid-70% range later in the fiscal year as production of Blackwell processors ramps up [9]. Palantir Technologies - The global AI software platforms market is projected to grow from$ 28 billion in 2023 to $153 billion in 2028, with Palantir positioned to benefit from this growth [11]. - Palantir's revenue growth accelerated to 29% in 2024, up from 17% in 2023, with a revenue of just under$ 2.9 billion [12]. - The company reported a 40% year-over-year increase in its remaining deal value (RDV) to $5.4 billion in Q4 2024, indicating a faster pace of contract signing [13][14]. - Palantir's customer count increased by 43% year-over-year, suggesting potential for further revenue growth as new customers sign larger contracts [15]. - The adjusted operating margin improved by 11 percentage points year-over-year, with adjusted earnings rising 64% in 2024 to$ 0.41 per share [16]. Investment Considerations - Nvidia offers exposure to the lucrative AI hardware market, while Palantir focuses on the growing adoption of generative AI software [18]. - Palantir's high valuation raises concerns, with analysts projecting only 15% gains over the next year, compared to Nvidia's expected 51% increase [19][20].