Nvidia vs. Palantir: Which Is the Better AI Stock for 2026? | The Motley Fool

Both Nvidia (NVDA 2.25%) and Palantir Technologies (PLTR 1.97%) reported staggering Q3 results, featuring the type of growth that keeps the AI (artificial intelligence) narrative alive and well.

But with both stocks delivering incredible returns for investors in 2025, it’s a good time to revisit these names. Is one a better pick than the other for 2026 and beyond? I’d say yes. In fact, I think one of the two stocks is a significantly better investment than the other.

Let’s take a look.

Nvidia: Demand exceeds supply

Not only do both companies possess strong balance sheets and generate substantial free cash flow, but they are also growing their top lines at rates that exceed 60%.

Starting with Nvidia, its fiscal third-quarter revenue rose 62% year over year to $57.0 billion. And its profit growth is even more impressive. Nvidia’s net income climbed 65% to $31.9 billion.

Of course, its data center segment once again did most of the work, with revenue up 66% year over year to $51.2 billion.

What’s particularly impressive is that, had it not been for supply constraints, the quarter would have been even better. Nvidia CEO Jensen Huang said in the company’s third-quarter earnings release that Blackwell sales for the period were “off the charts,” and sales of its cloud graphics processing units (GPUs) exceeded supply.

“We’ve entered the virtuous cycle of…