PLTR vs. NVDA: Why Palantir's AI Boom Looks Costly Next to Nvidia

Sep 5 - Palantir Technologies PLTR has been one of the standout names in 2025, with shares more than doubling year to date. Investors, however, now face the question of whether its valuation leaves room for further gains.

In the second quarter, Palantir grew commercial revenue 47% to $451 million, while government sales advanced 49% to $553 million. The company remains profitable, converting roughly one-third of revenue into net income, a rare feat among high-growth software peers. Its Artificial Intelligence Platform continues to draw demand from both government agencies and private companies.

Despite those results, Palantir's valuation raises concerns. The stock trades at 242 times forward earnings and a price-to-sales ratio of 115, making it one of the most expensive names in the market. Analysts argue that even if Palantir maintains strong growth, much of that future performance is already priced in.

For comparison, Nvidia NVDA grew revenue 56% in Q2 but trades at a forward multiple of 39. That contrast highlights how much optimism is embedded in Palantir's shares. With expectations high, any slowdown in revenue growth could pressure the stock.

Palantir and Nvidia differ fundamentally: Palantir sells software with high margins, recurring contracts and a sky-high 242x forward multiple, exposing returns to growth execution. Nvidia sells chips with massive scale, cash flow and a 39x forward multiple, offering a wider moat but facing supply constraints, making NVDA a lower-risk, scale play.

Is PLTR Stock a Buy?