Why Buying Nvidia Stock on the Dip Is Probably Smart -- and Buying Palantir Stock Probably Isn't
March 24, 2025

%3cdiv+class%3d%22blog_post_content_wrapper+layout_list%22%3e+%0a+%3cdiv%3e+%0a++%3cfigure%3e+%0a+++%3cdiv%3e+%0a++++%3cdiv%3e+%0a+++++%3cimg+alt%3d%22Why+Buying+Nvidia+Stock+on+the+Dip+Is+Probably+Smart+--+and+Buying+Palantir+Stock+Probably+Isn%27t%22+data-src%3d%22%2ffiles%2fimages%2f20250324%2fc0edcb9ae74ed335c0ca426563.jpeg%22+height%3d%22640%22+loading%3d%22eager%22+src%3d%22%2ffiles%2fimages%2f20250324%2fc0edcb9ae74ed335c0ca426563.jpeg%22+width%3d%22960%22+%2f%3e+%0a++++%3c%2fdiv%3e+%0a+++%3c%2fdiv%3e+%0a++%3c%2ffigure%3e+%0a++%3cp%3e+Sometimes+you%27re+hot.+Other+times+you%27re+not.+%3cstrong%3e+Nvidia+%3c%2fstrong%3e+%3cspan%3e+(NASDAQ%3a+NVDA)+%3c%2fspan%3e+and+%3cstrong%3e+Palantir+Technologies+%3c%2fstrong%3e+%3cspan%3e+(NASDAQ%3a+PLTR)+%3c%2fspan%3e+have+been+on+both+sides+of+the+fence+in+recent+months.+%3c%2fp%3e+%0a++%3cp%3e+Coming+into+2025%2c+these+two+artificial+intelligence+(AI)+stocks+were+on+a+roll.+Nvidia%27s+shares+soared+171%25+last+year+while+Palantir+skyrocketed+a+whopping+340%25.+The+stories+are+much+different+now.+Both+stocks+are+down+more+than+20%25+from+their+peaks+(with+Palantir+plunging+nearly+30%25+below+its+previous+high).+Is+buying+these+two+once-hot+AI+stocks+on+the+dip+a+smart+move%3f+%3c%2fp%3e+%0a++%3ch2%3e+Two+big+dips+with+different+dynamics+%3c%2fh2%3e+%0a++%3cp%3e+While+both+Nvidia+and+Palantir+have+seen+their+share+prices+take+a+shellacking%2c+their+big+dips+have+different+dynamics.+Let%27s+first+look+at+Nvidia.+%3c%2fp%3e+%0a++%3cp%3e+After+starting+the+year+with+a+nice+gain%2c+the+overall+trajectory+for+Nvidia+stock+has+been+downward+ever+since+(albeit+with+up-and-down+swings+along+the+way).+The+biggest+news+for+the+company+came+on+Feb.+26+with+its+fourth-quarter+update.+%3c%2fp%3e+%0a++%3cdiv+data-testid%3d%22inarticle-ad%22%3e+%0a+++%3cdiv+data-ad-loc%3d%22mid_center%22+data-ad-region%3d%22main-dynamic%22+data-ad-size%3d%22970x250%2c728x90%2c300x250%2cfluid%22+data-ad-unit%3d%22%2f22888152279%2fus%2fyfin%2fros%2fdt%2fus_yfin_ros_dt_mid_center%22+data-testid%3d%22ad-container%22%3e+%0a+++%3c%2fdiv%3e+%0a++%3c%2fdiv%3e+%0a++%3cp%3e+Nvidia+again+reported+tremendous+growth+with+Q4+revenue+soaring+78%25+year+over+year+and+adjusted+earnings+per+share+jumping+71%25.+However%2c+many+investors+were+concerned+that+the+chipmaker%27s+growth+continues+to+slow+and+its+gross+margins+are+sliding.+%3c%2fp%3e+%0a++%3cp%3e+Meanwhile%2c+Palantir%27s+share+price+began+to+slump+more+quickly+at+the+beginning+of+2025.+The+stock+soon+reversed+course%2c+though%2c+and+went+on+a+huge+run+that+eventually+resulted+in+a+65%25+year-to-date+gain.+But+Palantir%27s+momentum+hit+a+brick+wall+a+few+weeks+into+February.+%3c%2fp%3e+%0a++%3cp%3e+The+company%27s+Q4+results+announced+on+Feb.+3+weren%27t+the+culprit.+Instead%2c+investors+worried+about+Palantir+CEO+Alex+Karp%27s+planned+sales+of+%241.2+billion+of+his+shares+and+a+report+that+steep+U.S.+defense+budget+cuts+were+coming.+The+U.S.+government+is+Palantir%27s+largest+customer.+%3c%2fp%3e+%0a++%3ch2%3e+One+smart+pick%2c+one+not-so-smart+%3c%2fh2%3e+%0a++%3cp%3e+Returning+to+our+original+question%3a+Is+buying+these+stocks+on+the+dip+a+smart+move%3f+I+think+Nvidia+probably+is+a+smart+pick%2c+but+Palantir+probably+isn%27t.+%3c%2fp%3e+%0a++%3cp%3e+For+one+thing%2c+Nvidia%27s+growth+is+%3cem%3e+much+%3c%2fem%3e+stronger+than+Palantir%27s.+Even+though+Nvidia%27s+revenue+growth+is+slowing+somewhat%2c+the+company+still+projects+sales+will+jump+65%25+year+over+year+in+Q1.+Palantir+expects+full-year+2025+revenue+growth+of+31%25%2c+down+from+38%25+growth+in+2024.+%3c%2fp%3e+%0a++%3cdiv+data-testid%3d%22inarticle-ad%22%3e+%0a+++%3cdiv+data-ad-loc%3d%22mid_center_2%22+data-ad-region%3d%22main-dynamic%22+data-ad-size%3d%22970x250%2c728x90%2c300x250%22+data-ad-unit%3d%22%2f22888152279%2fus%2fyfin%2fros%2fdt%2fus_yfin_ros_dt_mid_center%22+data-testid%3d%22ad-container%22%3e+%0a+++%3c%2fdiv%3e+%0a++%3c%2fdiv%3e+%0a++%3cp%3e+Nvidia%27s+valuation+is+much+more+attractive+than+Palantir%27s%2c+too.+Sure%2c+Nvidia%27s+shares+trade+at+a+relatively+high+26.2+times+forward+earnings.+However%2c+factoring+in+growth+makes+the+stock+look+much+less+overpriced.+Nvidia%27s+price-to-earnings-to-growth+(PEG)+ratio+%2c+which+includes+five-year+growth+projections%2c+is+1.13%2c+according+to+%3cstrong%3e+LSEG+%3c%2fstrong%3e+.+By+comparison%2c+Palantir%27s+forward+earnings+multiple+is+a+sky-high+158.7.+Its+PEG+ratio+is+3.09.+%3c%2fp%3e+%0a+%3c%2fdiv%3e+%0a+%3cdiv+data-testid%3d%22read-more%22%3e+%0a++%3cp%3e+Looking+ahead%2c+I%27d+rather+be+sitting+in+Nvidia%27s+position+more+than+I+would+Palantir%27s.+Nvidia+should+enjoy+booming+sales+from+its+new+Blackwell+GPU+chips+this+year.+It+has+even+more+powerful+chips+on+the+way.+Agentic+AI%2c+robotics%2c+autonomous+vehicles%2c+and+possibly+artificial+general+intelligence+(AGI)+could+drive+increased+demand+for+its+technology.+%3c%2fp%3e+%0a++%3cdiv+data-testid%3d%22inarticle-ad%22%3e+%0a+++%3cdiv+data-ad-loc%3d%22mid_center_3%22+data-ad-region%3d%22main-dynamic%22+data-ad-size%3d%22970x250%2c728x90%2c300x250%22+data-ad-unit%3d%22%2f22888152279%2fus%2fyfin%2fros%2fdt%2fus_yfin_ros_dt_mid_center%22+data-testid%3d%22ad-container%22%3e+%0a+++%3c%2fdiv%3e+%0a++%3c%2fdiv%3e+%0a++%3cp%3e+Meanwhile%2c+Palantir%27s+top+customer+(Uncle+Sam)+is+slashing+spending+with+uncertainty+surrounding+how+much+agencies+will+spend+on+software+going+forward.+I+wouldn%27t+rule+out+the+possibility+that+Palantir%27s+close+association+with+the+U.S.+government+could+negatively+impact+its+ability+to+win+sales+outside+of+the+U.S.%2c+either.+%3c%2fp%3e+%0a++%3ch2%3e+How+this+take+could+be+proven+wrong+%3c%2fh2%3e+%0a++%3cp%3e+Note+that+I+used+the+word+%26quot%3bprobably%26quot%3b+in+my+answer+about+the+wisdom+of+buying+Nvidia+stock+on+the+dip+but+not+buying+Palantir.+Why+did+I+use+this+wiggle+word%3f+I+acknowledge+that+my+assumptions+could+be+wrong.+%3c%2fp%3e+%0a++%3cp%3e+Nvidia%27s+growth+could+slow+more+than+I+anticipate+if+the+demand+for+AI+chips+tapers+off.+Palantir+could+make+more+headway+in+landing+corporate+and+foreign+government+customers+than+I+think+it+will.+%3c%2fp%3e+%0a++%3cp%3e+While+my+take+could+be+proven+wrong%2c+though%2c+I+stand+by+it.+I%27m+not+alone+in+being+much+more+bullish+about+Nvidia+than+Palantir%2c+by+the+way.+Wall+Street+has+much+greater+expectations+for+Nvidia%2c+too.+%3c%2fp%3e+%0a++%3ch2%3e+Don%e2%80%99t+miss+this+second+chance+at+a+potentially+lucrative+opportunity+%3c%2fh2%3e+%0a++%3cp%3e+Ever+feel+like+you+missed+the+boat+in+buying+the+most+successful+stocks%3f+Then+you%e2%80%99ll+want+to+hear+this.+%3c%2fp%3e+%0a++%3cp%3e+On+rare+occasions%2c+our+expert+team+of+analysts+issues+a+%e2%80%9cDouble+Down%e2%80%9d+stock+recommendation%26nbsp%3bfor+companies+that+they+think+are+about+to+pop.+If+you%e2%80%99re+worried+you%e2%80%99ve+already+missed+your+chance+to+invest%2c+now+is+the+best+time+to+buy+before+it%e2%80%99s+too+late.+And+the+numbers+speak+for+themselves%3a+%3c%2fp%3e+%0a++%3cdiv+data-testid%3d%22inarticle-ad%22%3e+%0a+++%3cdiv+data-ad-loc%3d%22mid_center_4%22+data-ad-region%3d%22main-dynamic%22+data-ad-size%3d%22970x250%2c728x90%2c300x250%22+data-ad-unit%3d%22%2f22888152279%2fus%2fyfin%2fros%2fdt%2fus_yfin_ros_dt_mid_center%22+data-testid%3d%22ad-container%22%3e+%0a+++%3c%2fdiv%3e+%0a++%3c%2fdiv%3e+%0a++%3cp%3e+Right+now%2c+we%e2%80%99re+issuing+%e2%80%9cDouble+Down%e2%80%9d+alerts+for+three+incredible+companies%2c+and+there+may+not+be+another+chance+like+this+anytime+soon.+%3c%2fp%3e+%0a++%3cp%3e+%3cstrong%3e+Continue+%26raquo%3b+%3c%2fstrong%3e+%3c%2fp%3e+%0a++%3cp%3e+%3cem%3e+%3c%2fem%3e+%3c%2fp%3e+%0a++%3cp%3e+%3c%2fp%3e+%0a+%3c%2fdiv%3e+%0a%3c%2fdiv%3e