Nvidia vs Palantir: An AI Investment Showdown

Nvidia and Palantir are emerging leaders in AI. Nvidia shows robust revenue growth and a strong EPS growth rate, while Palantir progresses with healthy revenue increases. This analysis compares their financial metrics to forecast stock performance.

Date: 11-05-2025

AI Rating: 7

Overview of the AI Market Leaders
As AI firms thrive, companies like Nvidia and Palantir stand out. Nvidia reported a significant 78% annual sales growth, reaching $39.3 billion, and saw an EPS rise of 82% to $0.89. These results highlight its dominant position in the AI accelerator market. Conversely, Palantir's revenue climbed 39% year over year to $884 million, with EPS doubling to $0.08.

Insights into Earnings Per Share (EPS)
EPS is a crucial indicator for profitability and investment appeal. Nvidia's EPS growth outpaces Palantir’s, demonstrating its ability to generate profit from its core operations more effectively. The significant EPS increase at Nvidia signifies strong backing from ongoing tech investments in AI. Meanwhile, Palantir’s doubling of EPS suggests positive momentum but may not wholly reflect sustained profitability given its reliance on government contracts.

Revenue Growth Trends
Nvidia's impressive revenue growth trajectory reflects a thriving demand for AI technologies and data centers, significantly backed by major tech firms. In comparison, Palantir’s growth, while strong at 39%, indicates reliance primarily on government contracts, which may pose risks if defense budgets tighten. Hence, revenue growth for both firms suggests short to medium-term potential, but Nvidia has a stronger foothold in a rapidly evolving market.

Rating Impacts
Through this analysis, Nvidia appears more stable and better positioned in the AI landscape with a forward P/E ratio of 26, compared to Palantir's daunting ratio of 196, suggesting overvaluation. The high valuation of Palantir could lead to downward price pressure if growth expectations falter. Therefore, professional investors may favor Nvidia, anticipating continued price appreciation due to robust earnings and revenue growth.

Stocks: NASDAQ:NVDA NASDAQ:PLTR