The artificial intelligence (AI) sector has been on a wild ride, and two of its most popular stocks, Nvidia (NASDAQ: NVDA) and Palantir Technologies (NYSE: PLTR), have faced heavy sell-offs in recent weeks. As of now, Nvidia is down 25% from its all-time high, while Palantir has dropped 32%. This steep decline raises an intriguing question for investors: Is now the right time to buy either of these stocks, and if so, which one is the superior investment?
Nvidia: The Backbone of AI Computing
Nvidia has long been the dominant force in AI computing, with its graphics processing units (GPUs) serving as the foundation for AI model training and inference. The company’s Hopper architecture, including the H100 and H200 GPUs, has powered much of the AI revolution, and its upcoming Blackwell architecture promises even greater performance gains.
Despite the recent downturn, Nvidia’s financial strength remains robust. The company generated $130 billion in revenue over the past 12 months, and analysts project 56% revenue growth in its 2026 fiscal year (ending January 2026), bringing revenue to $204 billion. Nvidia’s ability to innovate and maintain a competitive edge in AI hardware solidifies its position as a market leader.
Palantir: The AI-Driven Data Powerhouse
Palantir operates in a different segment of AI, focusing on data analytics and AI-powered software solutions. Its Artificial Intelligence Platform (AIP) is gaining traction in both government and commercial sectors, helping businesses integrate AI into their workflows.
While Palantir’s business model is promising, its financials indicate a much smaller scale than Nvidia. The company reported $2.87 billion in revenue over the past year and is projected to grow revenue by 32% to $3.79 billion in 2025. Although its gross margins are strong at 80.25%, Palantir’s overall size and growth rate lag behind Nvidia.
Comparing Valuations: Which Stock Offers Better Value?
When evaluating potential investments, valuation plays a crucial role. Nvidia’s market cap sits at $2.7 trillion, and despite its premium valuation, its earnings growth and dominant market position justify its price. On the other hand, Palantir, with a $183 billion market cap, trades at a much higher multiple relative to its revenue and earnings, making it a riskier bet.
Given Nvidia’s superior revenue scale, higher projected growth, and fundamental role in AI infrastructure, it presents a more compelling investment opportunity. While Palantir has potential, Nvidia remains the dominant force in AI computing and appears to be the stronger stock to buy on this dip.
