Yahoo Finance·2025-12-07 20:31Core Insights - The stock market has experienced significant changes since the launch of ChatGPT, with the S&P 500 posting a 75% total return and the Nasdaq-100 gaining 118% [2] - AI stocks, particularly Nvidia and Palantir, have outperformed these indices, with Nvidia's stock increasing more than tenfold and Palantir's stock more than doubling Nvidia's gains [3] Valuation Comparisons - Palantir's stock is trading at an extraordinary 109 times trailing revenue, a figure that surpasses even the peak valuations during the dot-com bubble [4] - In contrast, Nvidia's valuation has compressed to about 24 times revenue, which appears more reasonable when compared to Palantir [5] Growth Potential - Nvidia, with an annual revenue base of $187 billion, may face challenges in maintaining hypergrowth, while Palantir's trailing-12-month sales are significantly lower at $3.9 billion [6] - Palantir's growth is currently bolstered by a favorable shift in federal spending, with government revenue growing at 40% year over year, indicating potential for acceleration in AI-powered defense applications [7] Market Limitations - Palantir's focus on military-style data analytics limits its addressable market compared to Nvidia's broader AI infrastructure offerings [8] - Both companies are priced for an ideal AI future, which may not unfold as expected, suggesting that investors might find better opportunities elsewhere in the AI ecosystem [8]