Nebius Vs. Palantir: The AI Infrastructure War At 100x Sales

Core Viewpoint - The competition between Nebius Group NV and Palantir Technologies Inc highlights the contrasting approaches to capturing value in the AI sector, with Nebius focusing on infrastructure and Palantir on applications [1][4]. Infrastructure vs. Applications - Nebius aims to be a leading infrastructure provider for AI by building extensive GPU farms, expanding data center capacity, and securing energy supplies [2]. - In contrast, Palantir positions itself as the "AI operating system" for enterprises and governments, integrating AI into various workflows [4]. Market Dynamics - Nebius is capitalizing on the high demand for GPUs, particularly as major tech companies seek to secure computing power [3][6]. - Palantir must demonstrate the effectiveness and necessity of its AI solutions across different industries to maintain its market position [6]. Valuation Metrics - Nebius has a price-to-sales ratio of 105.1, while Palantir's ratio is even higher at 135.8, indicating that both companies are valued for significant future growth [5]. - The market perceives different risks for each company, with Nebius potentially benefiting from immediate GPU demand and Palantir needing to prove the sustainability of its AI deployments [6]. Investor Considerations - The AI race is characterized by the competition for enduring value at different layers of the technology stack, with Nebius focusing on infrastructure and Palantir on being the central AI brain for enterprises [7]. - Both companies are priced for perfection at around 100x sales, suggesting that any execution missteps could have significant consequences [7].