If anyone had doubt about whether the AI boom is a fleeting moment, Palantir’s latest results scream loud and clear. Palantir recently reported numbers that not only smashed Wall Street estimates but also suggested something bigger, which is that the real-world adoption of AI is accelerating rapidly.
For Nvidia, whose chips form the foundation of this AI boom, this seems like great news. While rumors have circulated that AI is about to lose its mojo, Palantir’s flourishing AI platform says otherwise. It’s like observing a spark ignite into a firestorm, where Palantir is that spark for Nvidia’s firestorm.
Palantir’s 93% year over year commercial growth in its US commercial business, fueled mainly by demand for its Artificial Intelligence Platform (AIP), is an indication that AI adoption isn’t just alive and well, but rather is taking off. When businesses expand their base of AI customers by 64% and contract value by more than 200%, it’s not a coincidence, it’s an intentional change.
Also, this is where Nvidia comes in, where each and every one of these new AI customers will require hardware to drive their systems, and Nvidia will sell it to them. As businesses jump into infusing AI into their processes, demand for Nvidia’s data center GPUs will only increase. Nvidia can gain not only from tech firms but from virtually every sector leaping into AI.
Nvidia’s leadership in AI chips, 92% market share in data center GPUs, and projected 54% revenue growth makes it a wise long-term investment despite the latest rally. However, there might be fear that once the initial AI infrastructure build-out by companies is completed, spending will stabilize, putting Nvidia vulnerable to slower future demand.
Palantir’s blowout quarter is more than a victory for one firm, it’s a green light for Nvidia shareholders. AI adoption is shifting from tech titans to mainstream businesses, and that is amazing for Nvidia’s chips. Sure, no stock goes up infinitely, but the foundation sustaining Nvidia’s climb looks as solid as ever.
