The artificial intelligence boom is rapidly reshaping global industries, economies, and investment strategies. At the forefront of this shift, Palantir Technologies (NASDAQ: PLTR) and Nvidia (NASDAQ: NVDA) have emerged as two of the most closely tracked stocks, each offering distinct avenues for investors to tap into AI’s exponential growth.
Palantir has carved out its niche through advanced AI-driven data analytics software, while Nvidia dominates the hardware space with its powerful GPUs and AI chips.
As we approach the end of March 2025, investor sentiment surrounding both stocks has been mixed, with recent market volatility highlighting the importance of weighing long-term potential against short-term risks.
To provide clearer insight, Finbold consulted ChatGPT-4 to analyze which stock offers a better buy opportunity at this point. At press time, Nvidia shares are trading at $116.76, down 12% year-to-date, while Palantir is priced at $89, having experienced heightened volatility this month.
ChatGPT breaks down the bull and bear cases for Palantir and Nvidia
Upon querying, the AI model identifies Palantir as one of the standout names in the AI space, thanks to its aggressive push into artificial intelligence and big data analytics.
ChatGPT points to the company’s recent partnerships with Qualcomm, Heineken, Databricks, and KT Telecom as evidence of Palantir’s growing momentum beyond its reliance on government contracts.
However, the model also flags significant risks that investors should consider. Palantir’s shares currently trade at elevated valuation multiples—its forward price-to-earnings (P/E) ratio stands at 159x, with a forward price-to-sales (P/S) ratio of 57—raising concerns that much of its anticipated growth is already priced in.
Moreover, ChatGPT highlights Palantir’s heavy dependence on government contracts as a key vulnerability, particularly in light of looming defense budget cuts and a broader fiscal tightening environment.
Further weighing on sentiment is persistent insider selling, with co-founder Stephen Cohen and CEO Alex Karp offloading significant shares in recent months. While Palantir’s long-term AI potential remains compelling, ChatGPT emphasizes that the company’s ability to successfully scale its private-sector business and diversify revenue streams will be the deciding factor in sustaining its current valuation.
Without meaningful progress in these areas, Palantir’s stock could face further downside pressure amid declining government contract revenues and ongoing macroeconomic uncertainty.
Nvidia (NASDAQ: NVDA)
Nvidia continues to be a leader in the AI hardware space, fueled by growing demand across data centers, cloud computing, and enterprise AI solutions.
Despite the recent market pullback, the long-term case for Nvidia remains strong. At the company’s latest GTC conference, CEO Jensen Huang announced an ambitious roadmap designed to address the computational demands of next-generation AI models
The lineup includes the Blackwell Ultra GPU, set to launch later this year, followed by the Vera Rubin NVL144 platform in 2026, the Rubin Ultra NVL576 in 2027, and the Feynman GPU platform by 2028.
ChatGPT notes that these advancements not only strengthen Nvidia’s dominance in AI data centers but also tackle key concerns around energy efficiency and scalability. The introduction of the air-cooled B300 NVL16 platform and new networking solutions such as Spectrum-X Ethernet and Quantum-X InfiniBand reflect Nvidia’s focus on reducing energy consumption while supporting larger GPU clusters.
With Huang projecting data center spending to hit $1 trillion in the coming years and Nvidia’s growing partnerships across various sectors, the stock stands out as a long-term winner.
Strong financials, including a forward P/E ratio of 25.78 and a forward price-to-sales ratio of 14.18, further support the company’s outlook, making Nvidia well-positioned to weather short-term macroeconomic headwinds.
Verdict: Nvidia is the safer buy at this stage
While both companies are major players in the AI space, the AI model flagged Palantir’s extremely high valuation multiples, insider selling, and macro sensitivity as significant risks. Despite its strong fundamentals, much of Palantir’s growth appears to be priced in, and a further correction is possible.
In contrast, Nvidia, although not immune to market pressures, boasts a more diversified AI and semiconductor portfolio, strong financial performance, and broader analyst consensus supporting its long-term growth. Its valuation, though elevated, is more justified relative to its earnings growth and market leadership.
Featured image via Shutterstock
