Will Palantir Stock Trounce Nvidia in the Second Half of 2025?

Core Viewpoint - Palantir Technologies has significantly outperformed Nvidia in the first half of 2025, with Palantir's shares rising nearly 70% compared to Nvidia's single-digit percentage increase. The future performance of both companies remains uncertain, particularly for the second half of 2025 [1]. Palantir Technologies - Palantir's commercial revenue reached $255 million in Q1 2025, marking a 71$810 million, the highest in the company's history [3]. - The company's U.S. government revenue also saw a 45% year-over-year increase in Q1, totaling $373 million. The potential passage of President Trump's "Big, Beautiful Bill" has generated excitement among Palantir shareholders, as the company is considered a frontrunner for the Golden Dome missile defense system contract included in the legislation [4]. - Continued commercial success is anticipated for Palantir, bolstered by new collaborations with Elon Musk's AI company xAI and The Joint Commission shortly after Q1 results were reported [9]. Nvidia - Nvidia has faced challenges, primarily due to export restrictions on AI chips imposed by the Trump administration, leading to a$4.5 billion write-off in Q1 due to excess inventory and reduced demand for H20 GPUs [5]. - The company's CFO acknowledged that tariff-related uncertainties have temporarily impacted systems revenue in Q1 [6]. - Despite these challenges, Nvidia's new Blackwell GPUs are expected to be a commercial success, with the fastest ramp-up in the company's history anticipated to improve profit margins as the year progresses [10]. Future Outlook - Uncertainties surrounding the passage of the "Big, Beautiful Bill" and its potential impact on Palantir's contracts create a cloudy outlook for the company [11]. - The unpredictability of the Trump administration's trade policies raises concerns about Nvidia's performance in the second half of the year [12]. - While Palantir is likely to outperform Nvidia through the end of the year, it is not guaranteed that it will significantly surpass Nvidia [13]. - Valuation differences are notable, with Palantir's forward earnings multiple at nearly 244 compared to Nvidia's 32 times forward earnings, suggesting Nvidia may be a better long-term investment despite both companies experiencing slowing growth [14][15].