Wall Street Says Buy One and Sell the Other

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Wall Street Says Buy One and Sell the Other

Forecasts from Wall Street suggest that median target prices imply downside in one stock and upside in the other.

Nvidia is the market leader in data center GPUs and InfiniBand networking, which play crucial roles in supporting artificial intelligence applications.

Palantir is a technology leader in decision intelligence software and artificial intelligence platforms.

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Year to date, Nvidia (NASDAQ: NVDA) stock has returned 2%, while Palantir Technologies (NASDAQ: PLTR) stock has advanced 72%. But forecasts from Wall Street analysts suggest that investors should buy one and sell the other.

Among the 71 analysts who follow Nvidia, the median target price is $175 per share. That implies about 30% upside from its current share price of $135.

Among the 28 analysts who follow Palantir, the median target price is $100 per share. That implies about 23% downside from its current share price of $130.

However, Wall Street has consistently underestimated Palantir, so investors shouldn’t simply follow analysts’ opinions. Here’s a closer look at both companies.

Image source: Getty Images.

Nvidia reported encouraging financial results in the first quarter of fiscal 2026, which ended in April. Revenue increased 69% to $44 billion, and

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net income increased 33% to $0.81 per diluted share. Importantly, adjusted earnings would have increased 57% had it not been for a write-down related to semiconductor export restrictions.

The investment thesis for Nvidia is simple: The company holds more than 80% market share in data center graphics processing units (GPUs), chips used to accelerate complex workloads like artificial intelligence (AI). Morgan Stanley analysts think the company can maintain 80%+ market share for the foreseeable future.

Importantly, Nvidia also has a booming networking business. In fact, the chipmaker is the market leader in InfiniBand platforms, which are presently the preferred connectivity technology for back-end AI networks. And it recently added Alphabet’s

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and Meta Platforms as customers. Put simply, Nvidia is the company best positioned to capitalize on demand for AI hardware.

However, Nvidia is battling headwinds related to semiconductor export restrictions. The Trump administration recently

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, but it also banned the unlicensed ***** of H20 GPUs to China, which effectively stops the company from participating in that market. Nvidia wrote down $4.5 billion in H20 inventory during the first quarter, and management says it will lose $8 billion in revenue in the second quarter.

Story continues

Nevertheless, Wall Street estimates that Nvidia’s adjusted earnings will increase 44% in fiscal 2027, according to LSEG. That estimate makes the current valuation of 43 times earnings look cheap. I wholeheartedly agree with Wall Street’s rating on Nvidia. Patient investors should feel comfortable buying a position at the current price.

Palantir reported strong Q1 financial results. Customers climbed 39% to 769 and the average existing customer spent 124% more. Revenue soared 39% to $884 million, the seventh straight acceleration, and non-GAAP earnings increased 62% to $0.13 per diluted share.

The investment thesis for Palantir centers on its unique software architecture, which not only lets customers pull nuanced insights from complex data, but also creates a feedback loop that yields insights that improve over time. The International Data Corp. (IDC) has recognized Palantir as the market leader in decision intelligence software.

Palantir also says its software architecture is unique in its ability to operationalize artificial intelligence, meaning its platforms can help clients move AI applications from prototype to production more effectively than other solutions on the market. Forrester Research recently ranked Palantir as a technology leader in AI platforms, awarding it higher scores than peers like

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and

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.

However, not even the best business is worth buying at any price, and Palantir commands a very rich valuation. The stock currently trades at 285 times adjusted earnings. This looks particularly expensive because Wall Street estimates that the company’s earnings will increase just 26% in the current year.

Here’s the bottom line: Palantir is an excellent company and I believe it will be worth more in the future, but I also think the risk-reward profile is heavily skewed toward risk at the current price. So, prospective investors should wait for a better buying opportunity, but current shareholders comfortable with volatility can sit tight.

Before you buy stock in Palantir Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 

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for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when 

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 made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $651,049!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $828,224!*

Now, it’s worth noting Stock Advisor’s total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of June 2, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for

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and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors.

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has positions in Nvidia and Palantir Technologies. The Motley Fool has positions in and recommends Alphabet, Meta Platforms,

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, Nvidia, and Palantir Technologies. The Motley Fool recommends the following options: long January 2026 $395 calls on

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and short January 2026 $405 calls on

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. The Motley Fool has a

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.

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was originally published by The Motley Fool

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#Wall #Street #Buy #Sell

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