Palantir Stock vs. Nvidia Stock: Wall Street Says Buy One Before It Soars 50%

Palantir Stock vs. Nvidia Stock: Wall Street Says Buy One Before It Soars 50%

  • 21.03.2025 15:58
  • fool.com
  • Keywords: No Impact, No Companies

Wall Street favors Nvidia over Palantir. Nvidia offers a 50% upside versus Palantir's 7%, with Nvidia seen as undervalued and Palantir costly.

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Context

Analysis of Palantir vs. Nvidia Stock Performance and Market Implications

Key Comparisons and Metrics

Palantir Technologies (PLTR)

  • Market Cap: $213B
  • Current Price: $90.94 (as of March 21, 2025)
  • Today's Change: -4.06% ($3.54)
  • Analyst Rating: Consensus "Hold"
  • Median Target Price: $97 (7% upside from current price)
  • Revenue Growth: 29% YoY in 2024
  • Net Income Growth: 64% YoY in 2024
  • PEG Ratio: 5.9
  • Valuation: Expensive at 220x adjusted earnings

Nvidia (NVDA)

  • Market Cap: Not explicitly stated
  • Current Price: $117.64 (as of March 21, 2025)
  • Today's Change: -0.75% ($0.89)
  • Analyst Rating: Consensus "Buy"
  • Median Target Price: $175 (50% upside from current price)
  • Revenue Growth: 114% YoY in 2024
  • Adjusted Earnings Growth: 130% YoY in 2024
  • PEG Ratio: 0.78
  • Valuation: Undervalued at 40x adjusted earnings

Market Trends and Industry Implications

Palantir's Strengths

  • Leadership in Decision Intelligence: Ranked as a leader by IDC and Dresner Advisory Services.
  • Strong Demand: Customer base increased 43% YoY, with average spending up 20%.
  • AI Platform Growth: Market size expected to grow at 40% CAGR to $153B by 2028.

Nvidia's Dominance

  • GPU Market Share: ~98% in data center GPUs and >90% in AI accelerators.
  • Total Addressable Market (TAM): Over $1 trillion across AI infrastructure, embedded systems, and AI software.
  • AI Infrastructure Growth: Market size expected to grow at 37% CAGR to $200B by 2028.

Competitive Dynamics

  • Palantir's Differentiation: Focus on operationalizing AI, with a unique "prototype-to-production" capability.
  • Nvidia's Comprehensive Solution: Strength in hardware (GPUs), software (CUDA platform), and interconnects, creating a competitive moat.

Strategic Considerations

  • Valuation Concerns: Palantir's high valuation (220x adjusted earnings) raises questions about long-term returns.
  • Nvidia's Attractiveness: Undervalued at 40x adjusted earnings with strong growth prospects, making it a more attractive buy for analysts.

Long-Term Effects and Regulatory Impacts

  • AI Market Expansion: Both companies benefit from the growing AI market, but Nvidia's diversified product portfolio provides greater resilience.
  • Regulatory Risks: No significant regulatory risks mentioned in the text, though competition could intensify as more players enter the AI space.

Conclusion

Wall Street analysts strongly favor Nvidia over Palantir due to its cheaper valuation, dominant market position, and higher growth potential. While Palantir is undeniably a leader in decision intelligence, its high price tag makes it riskier for investors seeking significant upside without further price correction.