Nvidia vs Palantir: Wall Street says to buy only 1 of these 2 rising stocks
Nvidia (NASDAQ:NVDA) and Palantir Technologies (NASDAQ:PLTR) have been two of the stock market’s biggest winners over the past few years — they also best the Dow Jones Industrial Average and S&P 500, respectively, in 2024.
Investors love these stocks for their position in the high-growth artificial intelligence (AI) market. Nvidia is the world’s leading AI chip designer, and Palantir sells a popular AI-powered software platform that helps customers make better use of their data. Both of these companies have reported a boom in revenue and demand, and the long-term prospects look bright as well.
Nvidia: 30% upside forecast above Wall Street’s average target price
Nvidia reported encouraging financial results for the first quarter of fiscal 2026, ended in April. Revenue grew 69% to $44 billion, and non-GAAP net income rose 33% to $0.81 per diluted share. Importantly, adjusted earnings would have increased by 57% if not for write-downs related to semiconductor export restrictions.
The investment thesis for Nvidia is simple: The company holds more than 80% market share in data center graphics processing units (GPUs), chips used to speed up complex workloads such as artificial intelligence (AI). Analysts at Morgan Stanley believe the company can maintain more than 80% market share for the foreseeable future.
Importantly, Nvidia’s networking business is also growing rapidly. In fact, the chipmaker is the market leader in the InfiniBand platform, currently the preferred connectivity technology for back-end AI networks. And it recently added Alphabet’s Google and Meta Platforms as customers. Simply put, Nvidia is best positioned to capitalize on the demand for AI hardware.
However, Nvidia is grappling with challenges related to semiconductor export restrictions. The Trump administration recently repealed the AI Diffusion Rule, but it also banned unlicensed sales of H20 GPUs to China, which effectively prevents the company from participating in that market. Nvidia lost $4.5 billion in H20 inventory during the first quarter, and management says it will lose $8 billion in revenue in the second quarter.
Still, according to LSEG, Wall Street estimates that Nvidia’s adjusted earnings will grow 44% in fiscal 2027. That estimate makes the current valuation of 43 times earnings look cheap. I fully agree with Wall Street’s rating on Nvidia. Patient investors should feel comfortable buying any position at the current price.
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Read also:- https://royfinance.in/the-rise-of-decentralized-finance-forex-trading/
source from:- Nvidia vs Palantir: Wall Street Says Buy Only 1 of These 2 Soaring Stocks
