Nvidia or Palantir? We asked ChatGPT which stocks are the best to buy in 2025.

As demand for artificial intelligence (AI) grows, Nvidia (NASDAQ: NVDA) and Palantir (NYSE: PLTR) have become leading players in the AI ​​stock market, with their shares up 206% and 252%, respectively, in 2024.

Nvidia shares are currently valued at $147.63, while Palantir is trading at $58.39. Both stocks are among the top performers in the S&P 500, reflecting strong investor enthusiasm for AI-focused companies.

However, despite their impressive successes, Nvidia and Palantir have very different business models and valuation profiles, making it difficult for investors looking to 2025 to choose between them.

To set the record straight, Finbold consulted ChatGPT-4 to find out which stocks are most likely to beat expectations in the coming year.

Nvidia: AI Hardware Foundation with Proven Profitability

Nvidia is widely known for its dominance in artificial intelligence hardware, especially graphics processing units (GPUs), which are critical for training and running large-scale artificial intelligence models.

The data center segment powered by these GPUs earned $26.3 billion in the second quarter of 2024, marking 154% year-over-year growth and strengthening its critical role in AI infrastructure.

Nvidia’s growth outlook remains strong, with its data center business, upcoming Blackwell chips and continued demand for its Hopper architecture shaping future potential.

Blackwell’s advanced B200 GPUs, which were initially delayed due to a design flaw, are now set to resume shipping by the end of the year following a design fix made in collaboration with Taiwan Semiconductor Manufacturing Company (NYSE: TSM). Reuters reported.

In addition to Blackwell, Nvidia’s H100 chips are critical to supporting generative AI platforms such as ChatGPT, further cementing its dominance in the AI ​​space.

Nvidia’s stronghold in gaming and automotive enhances stability, diversifies revenue streams and supports long-term financial health.

The company’s financial performance is also impressive. Nvidia has a significant market capitalization of $3.6 trillion and a forward price-to-earnings (P/E) ratio of 43.41, reflecting high expectations consistent with its proven profitability and growth trajectory.

Analysts expect Nvidia’s earnings per share (EPS) to grow 37.36% over the next five years, driven by strong demand in its data center and artificial intelligence segments.

In addition, Nvidia is scheduled to release earnings on November 20, 2024, which could further impact investor sentiment and potentially serve as a catalyst for further growth.

Palantir: Fast-growing leader in artificial intelligence software with valuation problems

Unlike Nvidia, which specializes in hardware, Palantir specializes in artificial intelligence software, particularly data analytics and machine learning solutions for government and commercial clients.

Its flagship artificial intelligence platform (AIP) saw widespread adoption in 2024, particularly among commercial customers in the US, contributing to a 30% year-over-year increase in revenue in the third quarter.

Palantir shares have seen remarkable growth, up 252% year to date. However, it trades at a premium, with a price/sales (P/S) ratio of 49 and a forward P/E of 128, making it very expensive by industry standards.

Analysts have expressed concern about the lofty valuation, with most recommending a “hold” due to Palantir’s reliance on high growth expectations, making it more vulnerable to setbacks as its profitability numbers continue to evolve.

Despite these valuation concerns, Palantir’s growth in sectors such as defense and finance continues to attract investors. In the third quarter of 2024, Palantir reported its highest-ever quarterly profit, with net income of $144 million and adjusted operating margin of 38%, up from 29% in the prior year.

Additionally, the company closed 104 deals valued at more than $1 million each, bringing its total contract value (TCV) to $1.1 billion, up 33% year over year.

That said, Palantir’s future depends heavily on the success of AIP as the company seeks to position itself as the indispensable provider of artificial intelligence software across all industries.

ChatGPT-4o verdict: Nvidia or Palantir for 2025?

While both companies have great potential amid growing demand for AI, AI models suggest Nvidia stands out as a safer and potentially better long-term investment.

Additionally, analysts expect Nvidia’s market capitalization could continue to grow, potentially reaching $4 trillion or more, if demand for AI remains strong, according to the forecast Luck. Nvidia’s important role in AI development further cements its lead in the AI ​​revolution.

In contrast, Palantir offers compelling growth potential but has higher volatility due to its elevated valuation and early-stage profitability.

However, heading into 2025, Nvidia appears to be the preferred option for risk-averse investors, while Palantir may appeal more to those looking for aggressive, high-growth opportunities.

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