Will Palantir Stock Trounce Nvidia in the Second Half of 2025?

If Palantir Technologies (NASDAQ: PLTR) and Nvidia (NASDAQ: NVDA) were in the stock equivalent of a boxing match, we'd have a technical knockout so far this year. Palantir has crushed Nvidia, with its shares skyrocketing close to 70%, while Nvidia's stock is up by only a single-digit percentage.

However, the match isn't over. Will Palantir stock trounce Nvidia in the second half of 2025?

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Palantir's momentum, Nvidia's malaise

Palantir's tremendous momentum in the first five or so months of 2025 has been the result of several factors. The company's rapidly growing commercial revenue is one of its biggest tailwinds. Palantir reported commercial revenue of $255 million in the first quarter, up 71% year over year and 19% quarter over quarter. Its U.S. commercial total contract booking value soared 183% year over year to $810 million, the highest quarterly number in Palantir's history.

Of course, Palantir still relies heavily on government contracts. That business is also booming, with the company's U.S. government revenue jumping 45% year over year in Q1 to $373 million. The prospects of congressional passage of President Trump's "Big, Beautiful Bill" have also excited Palantir shareholders. Palantir is one of several companies viewed as front-runners in developing the Golden Dome missile defense system included in the legislation.

What about Nvidia? Instead of momentum, the tech stock has mainly experienced malaise. The Trump administration's export restrictions on artificial intelligence (AI) chips have created a dark cloud that's hovering over Nvidia's head. The company wrote off $4.5 billion in Q1 because of excess inventory and lower demand for its H20 GPUs as a result of those export restrictions.

That wasn't the only example of President Trump's trade policies that are hurting Nvidia. Tariffs are having an impact, too. CFO Colette Kress acknowledged in the company's recent earnings call that "tariff-related uncertainty temporarily impacted" systems revenue in the first quarter.

Peering into the crystal ball for the second half of 2025

What's in store for Palantir and Nvidia in the second half of 2025? I'll do my best to peer into the crystal ball to predict the near-future for the two companies.

For Palantir, I think continued commercial success is highly likely. Within three days after reporting its Q1 results, the software maker announced a new commercial collaboration with Elon Musk's AI company xAI and investment holding company TWG Global, as well as a partnership with nonprofit healthcare standards organization The Joint Commission. I expect Palantir's commercial revenue will keep growing robustly in the second half of the year.

With Nvidia, I predict that its new Blackwell GPUs will remain a smashing commercial success. Blackwell is already the company's fastest ramp-up in its history. I look for Blackwell's profit margins to improve as the year progresses, boosting Nvidia's earnings.

My crystal ball gets cloudy on two fronts, though. I'm not sure about whether the "Big, Beautiful Bill" will pass the Senate in its current form. And while I think Palantir has a good shot at winning part of the Golden Dome contract if the bill does become law, it's not a slam dunk.

I'm also not confident predicting how the Trump administration's trade policies will affect Nvidia in the second half of the year. President Trump's plans change too frequently. It's also possible that the federal courts will ultimately pull the rug from underneath his efforts to levy steep across-the-board tariffs.

Will Palantir trounce Nvidia?

Let's return to our original question: Will Palantir stock trounce Nvidia in the second half of 2025? I think the uncertainties surrounding Nvidia make it more likely than not that Palantir will outperform Nvidia through the end of the year. However, I wouldn't go as far as saying that Palantir will trounce Nvidia.

There's also one key factor that could make Nvidia the better pick in the back half of the year: valuation. Palantir's forward earnings multiple is nearly 244. If the company's growth were accelerating, that nosebleed valuation might not be so alarming. However, Palantir's growth is slowing.

Nvidia's growth is slowing, too. But the GPU maker's shares trade at 32 times forward earnings. That's still high. It isn't in the stratosphere like Palantir's, though.

Maybe valuation won't matter over the next few months. However, valuation always matters over the long term. Because of this, I think Nvidia is a better stock to own over the long term than Palantir.

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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy.