The Motley Fool·2025-11-28 11:00Core Insights - Both Palantir and Nvidia are experiencing significant growth in the AI sector, with Nvidia's stock up 1,100% and Palantir's up nearly 2,300% since 2023 [2] - In 2025, Palantir's stock increased around 100%, while Nvidia's rose over 30%, indicating strong market performance [2] - The article suggests that one of these stocks may struggle to meet expectations in 2026, hinting at differing valuations and growth potential [2][10] Company Overview - Palantir specializes in AI-powered data analytics, initially serving government agencies before expanding to commercial markets [4] - Nvidia produces graphics processing units (GPUs) and related equipment, benefiting from substantial investments in AI infrastructure [7] Financial Performance - Palantir's Q3 2025 revenue grew by 63% year-over-year, with U.S. commercial revenue increasing by 121% [6] - Nvidia reported Q3 FY 2026 revenue of $57 billion, growing at a rate of 62%, exceeding internal expectations [9] Market Valuation - Palantir's stock is valued at 156 times its 2026 earnings, while Nvidia is valued below 25 times, indicating higher expectations for Palantir [12] - The valuation disparity suggests that Palantir may face challenges in sustaining its stock price growth compared to Nvidia [12][10] Future Outlook - Both companies are expected to continue thriving in the AI market, driven by rising demand [13] - However, Nvidia is viewed as a more attractive investment based on its valuation metrics [13]