Those looking to partake in the spoils of the AI revolution are understandably intrigued by the investment cases of Nvidia (NASDAQ:NVDA) and Palantir (NASDAQ:PLTR). Both these AI giants have been growing by leaps and bounds, and their share prices have soared to the heavens during the past few years.
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While the AI revolution is the common denominator connecting the two firms, they occupy unique lanes of the growing ecosystem. Nvidia is the dominant manufacturer of the hardware required to run AI, and Palantir has pioneered a leading software solution that allows customers to use the technology to streamline their operations.
By pretty much every metric, Nvidia has stormed to the front of the pack. It has ridden astronomical revenues ($57 billion in the last reported quarter) to become the largest publicly-traded company in the world, and controls the vast majority of the data center market.
While the scale of Palantir’s business is significantly smaller, its current Rule of 40 score of 114% reflects massive top- and bottom-line growth. Customer count over the trailing twelve months ended in September rose 45% year over year, indicating that demand for its proprietary AIP remains piping hot.
While one could theoretically go with both of these historic winners, top investor Daniel Sparks is placing his chips on just one of them.
“If I had to choose one of these two stocks for an investment in 2026, I’d choose Nvidia,” explains the 5-star investor, who is among the top 1% of stock pros covered by TipRanks.
Sparks is quick to acknowledge that both companies are growing at similar rates, with Palantir’s 63% year-over-year revenue growth slightly edging out Nvidia’s 62%. What separates the two investment cases is their respective valuations.
“In Palantir’s case, the stock deserves to have soared over the last few years, but shares may have simply soared too far, too fast,” adds Sparks. “At a certain point, even a company seeing extraordinary growth can become overvalued.”
Adding to the bullish argument for Nvidia, the company’s net income climbed even higher than its revenues, up 65% to reach $31.9 billion from the previous year. Sparks also mentions that the physical supply constraints proved to be the limiting factor for Nvidia last quarter, with sales of its cloud Graphics Processing Units exceeding supply.
Though he’s clearly much more comfortable with NVDA, Sparks isn’t throwing caution to the wind. The investor notes that increasing competition, among other pressures, could cut into Nvidia’s margins, making an investment here not without risk.
“Even though Nvidia’s stock is the better buy (of) the two, I wouldn’t rush to make a meaningful position in the stock at this level,” concludes the investor. (To watch Sparks’ track record, click here)
Wall Street largely agrees. Nvidia carries a Strong Buy consensus, backed by 39 Buys, just 1 Hold, and 1 Sell. Analysts’ average 12-month price target of $264.97 implies upside of ~43%. Palantir, by contrast, faces a more skeptical crowd. With 10 Holds and 2 Sells outweighing 5 Buys, the stock earns a Neutral consensus rating, and its $192.88 average price target points to limited ~8% upside in 2026. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.