Predicting Stock Performance: Palantir versus Nvidia in 2025
Two of the leading tech stocks of 2025 were Palantir (PLTR 3.78%) and Nvidia (NVDA 1.37%). In terms of stock performance, Palantir was the dominant performer in 2025, with its stock soaring about 325%, while Nvidia's stock saw a significant gain of approximately 180%.
However, the question arises: Which stock is likely to surpass the other in 2026? Let's consider some factors to help make a decision.
Nvidia has a formidable moat
Companies with substantial moats are generally deemed desirable. In simple terms, a moat represents the benefits a company has over its competitors that enable it to maintain its competitive edge and market dominance.
Nvidia has established a significant moat in the artificial intelligence (AI) infrastructure space due to its wide moat in business, created by its CUDA software platform. This platform allowed Nvidia to use its graphic processing units (GPUs)—originally designed for speeding up graphics rendering in video games—to handle other tasks more efficiently. The result was an increasing number of developers learning the platform, making CUDA the de facto platform for programming GPUs.
As a result, Nvidia boasts nearly a 90% market share in the GPU space.
Palantir's moat is less apparent, primarily due to the evolving AI software sector Palantir operates within. However, its AI platform (AIP) has made significant inroads into the commercial sector and is seeing a resurgence in growth in the government sector. Palantir has carved out a niche for itself in mission-critical tasks for government agencies, such as combating terrorism and tracking COVID-19 cases during the pandemic.
Palantir believes that AI models will become commoditized and that the true differentiator will be in the application and workflow, which is the focus of its analytics and pattern recognition expertise. This expertise, Palantir claims, will allow it to rigorously test AI applications and swiftly transfer them from proof-of-concept to AI-powered software solutions.
While this strategy is showing promise, more time is required to determine its effectiveness.
Both companies are experiencing robust growth
Nvidia's revenue growth has been phenomenal in 2025, considering its substantial revenue base. Through the first nine months of the year, Nvidia increased its revenue by an astounding 135% to $91.2 billion. For its third quarter of 2025, revenue soared 94% to $35.1 billion, with impressive margin of around 75%.
Nvidia is experiencing insatiable demand for its chips, with demand consistently exceeding supply for its latest GPU architecture. This trend is expected to persist in the years ahead as major tech firms eagerly compete to create more sophisticated AI models, necessitating ever-greater computing power for their development.
Analysts forecast Nvidia's revenue to grow more than 50% in 2026 to $195.4 billion.
Palantir's revenue growth has been significantly less brisk than Nvidia's, but it has been steadily accelerating throughout the year. In the first quarter, the company reported a 21% revenue increase compared to the same period in 2024. This growth accelerated to 27% in the second quarter and 30% in the third quarter, reaching $726 million.
However, some segments of the company are growing more rapidly, with U.S. commercial revenue soaring 54% in the previous quarter and U.S. government revenue increasing 40%. Unfortunately, international markets are lagging behind.
Due to strong customer growth, including an increase of 39% in the previous quarter, and the opportunity to transition customers from prototype work to full-scale production, Palantir has tremendous potential for accelerated revenue growth. However, this potential is not yet reflected in analyst estimates, which predict a revenue growth of approximately 24% in 2026 to $3.47 billion.
Valuation indicates a clear winner
Values-wise, Nvidia is the unquestioned leader. It boasts an attractive valuation, with a forward price-to-earnings (P/E) ratio of only 31.6 based on 2026 projections and a price-earnings-to-growth (PEG) ratio of roughly 1. A PEG ratio below 1 typically suggests undervalued stocks, while growth stocks frequently have PEG ratios significantly upper than 1.
Palantir, on the other hand, has a forward price-to-sales (P/S) ratio of about 47.5, a hefty valuation considering its 30% revenue growth rate and a multiple greater than twice its historic SaaS (software-as-a-service) maximums.
Conclusion
Based on the available data, Nvidia appears to be the victor on paper due to its stronger revenue growth, established moat, and more attractive valuation. If analyst forecasts remain reasonably accurate, Nvidia is expected to outperform its rival in 2026.
Unforeseen circumstances might shape a distinct result. If Palantir manages to demonstrate its AI platform's superiority and gains broad acceptance, leading to skyrocketing revenue, it could outperform once more. Conversely, if unexpected cuts occur in AI infrastructure spending, Nvidia might underperform. I'm backing Nvidia, but these situations are worth keeping an eye on in 2025.
In light of the strong revenue growth, established moat, and attractive valuation, investing in Nvidia could potentially yield high returns in 2026, as indicated by analyst forecasts. However, it's important to consider the potential impact of unforeseen circumstances on both companies, such as Palantir demonstrating its AI platform's superiority or unexpected cuts in AI infrastructure spending.
Considering the financial aspects, one might want to allocate a portion of their money into both promising stocks, Palantir and Nvidia, in order to diversify their investment portfolio and maximize potential returns. With careful monitoring of the market trends and developments in both companies, investors can make informed decisions for their financial strategy.
