Shares of Nvidia (NVDA -1.64%) and Palantir Technologies (PLTR -0.62%) have fallen sharply during the recent market rout. Wall Street sees upside in both stocks, but analysts expect more substantial gains for Nvidia, as detailed by the 12-month target prices below:
- Among the 67 analysts who follow Nvidia, the median target price is $175 per share. That implies a roughly 73% upside from the current share price of around $101, as of April 8.
- Among the 27 analysts who follow Palantir, the median target price is $96 per share. That implies a roughly 18% upside from the current share price of around $81, as of April 8.
Investors shouldn’t necessarily take Wall Street at its word. Here’s a closer look at Nvidia and Palantir.
Nvidia
The investment thesis for Nvidia is simple: Its dominance in accelerated computing, a discipline that brings together specialized hardware and software to speed up complex data center workloads, means Nvidia is ideally positioned to monetize artificial intelligence (AI). Its graphics processing units (GPUs), also called AI accelerators, are the most coveted chips on the market. And the company is a leader in AI networking gear.
Beyond that, Nvidia supplements its data center hardware with a robust suite of software development tools called CUDA. The platform comprises hundreds of code libraries, frameworks, and pretrained models that assist engineers in building everything from AI agents to autonomous cars and robots. No other chipmaker has a software ecosystem remotely comparable to CUDA.
Toshiya Hari at Goldman Sachs last year wrote, “We believe Nvidia will remain the de facto industry standard for the foreseeable future given its competitive advantage that spans its hardware and software capabilities.”
Nvidia reported exceptional financial results in the fourth quarter, beating estimates on the top and bottom lines. Revenue increased 78% to $39 billion on strong momentum in the data center segment driven by demand for AI infrastructure. Meanwhile, non-GAAP (adjusted) earnings rose 71% to $0.89 per diluted share.
Wall Street expects Nvidia’s adjusted earnings to increase 51% in fiscal 2026, which ends in January. That estimate seems reasonable given that Grand View Research anticipates 36% annual growth in AI spending across hardware, software, and services through 2030. And the current valuation of 35 times earnings looks cheap by comparison. Investors should feel comfortable buying a position in this AI stock today.
Palantir Technologies
The investment thesis for Palantir centers on its unique ability to operationalize artificial intelligence for clients across the commercial and government sectors. To elaborate, while many companies provide AI development tools, Palantir actually helps customers build and deploy AI applications in a way that solves problems and improves decision-making.
Chief Revenue Officer Ryan Taylor recently explained, “Our unique capability lies in moving from prototype to production.” Also, CTO Shyam Sankar added, “Years of foundational investments in our infrastructure and ontology have positioned us uniquely to harness and deliver on AI demand.” Forrester Research in the second half of last year ranked Palantir as a leader among AI platform providers.
Palantir looked strong in the fourth quarter as it beat expectations on the top and bottom lines. Customers climbed 43% to 711, and the average spend per existing customer ticked up 20%. Revenue increased 36% to $828 million, the sixth straight acceleration, and non-GAAP earnings climbed 75% to $0.14 per diluted share.
Wall Street expects Palantir’s adjusted earnings to increase 37% in 2025. That estimate may be a little low given International Data Corp. (IDC) anticipates 40% annual growth in AI platform spending through 2028. But the current valuation of 200 times earnings would look pricey even if Palantir’s earnings grow twice as quickly as Wall Street anticipates.
I think patient investors can buy a very small position today, but I also believe Nvidia is the better buy at its current price.
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