Artificial Intelligence Powerhouses: A Tale of Two Stocks
Nvidia and Palantir: Two AI Giants, Different Fortunes
The artificial intelligence economy has been a hotbed of activity on Wall Street, with two companies standing out from the crowd: Nvidia and Palantir Technologies. While both are key players in the AI space, hedge fund billionaires have been making some interesting moves, buying up Nvidia shares and selling off Palantir.
Hedge Fund Heavyweights Weigh In
Ken Griffin’s Citadel and David Shaw’s D.E. Shaw, two of the most profitable hedge funds in history, have been making significant trades in the third quarter. Citadel increased its Nvidia position by 194%, making it the third-largest holding, while simultaneously reducing its Palantir stake by 91%. D.E. Shaw followed suit, increasing its Nvidia position by 53% and reducing its Palantir stake by 45%.
Nvidia’s Impressive Performance
Nvidia’s recent financial results have been nothing short of impressive. The company reported a 94% increase in sales to $35 billion, with non-GAAP earnings more than doubling to $0.81 per diluted share. This marks the sixth consecutive quarter of triple-digit earnings growth. Wall Street expects Nvidia’s adjusted earnings to increase at 39% annually through fiscal 2027, making its current valuation of 52 times adjusted earnings look reasonable.
The Blackwell Advantage
Nvidia’s Blackwell GPUs are set to revolutionize the AI industry, delivering up to four times faster AI training and 30 times faster AI inference versus the previous Hopper architecture. The production ramp began in the fourth quarter of fiscal 2025 and will continue into fiscal 2026. Analysts believe Blackwell sales alone could top $200 billion in fiscal 2026, crushing consensus sales and earnings estimates.
Palantir’s Solid Performance, But High Valuation
Palantir reported strong third-quarter financial results, beating expectations with a 30% increase in revenue to $725 million. The company’s customer count climbed 39%, and the average existing customer spent 18% more over the past year. However, the stock trades at an absurd 205 times adjusted earnings, making it a pricey investment.
The Verdict: Nvidia Looks Attractive, Palantir Not So Much
While both companies are excellent businesses, Nvidia’s attractive valuation and underappreciated opportunities in Blackwell GPUs and autonomous robotics make it a more compelling investment. Palantir, on the other hand, is an excellent business, but its high valuation makes it a stock to avoid until the price falls substantially.
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