Palantir Technologies (PLTR 4.53%) stock gained ground today, climbing as much as 5.5%. As of 11:15 a.m. ET, the stock was still up 1.8%.
The artificial intelligence (AI) software and data mining specialist rallied on news that another big player in the AI space issued a blockbuster financial report.
Image source: Getty Images.
What AI bubble?
There have been concerns that the adoption of AI was slowing, but the financial results delivered by Nvidia (NVDA 2.15%) appeared to put those fears to rest, at least for now.
For its fiscal 2026 third quarter (ended Oct. 26), the AI chipmaker generated revenue that rose 62% year over year and 22% quarter over quarter to a record $57 billion. This drove earnings per share (EPS) up 60% to $1.30. The headline was that there was no slowing in demand for the graphics processing units (GPUs) that power AI. Revenue for Nvidia's data center segment, which includes chips used for cloud computing, AI, and data centers, soared to $51.2 billion, up 66% year over year and 25% sequentially.
In comments made during the earnings call, Nvidia CFO Colette Kress confirmed that the company is "on track" for $500 billion worth of sales (including the just-reported quarter) for its AI-centric Blackwell and Rubin chips through the end of calendar 2026. That suggests Nvidia anticipates sales of roughly $378 billion next year, which would represent year-over-year sales growth of approximately 78%.
NASDAQ: PLTR
Key Data Points
What does this have to do with Palantir?
Palantir developed its Artificial Intelligence Platform (AIP), which aggregates company-specific data from disparate systems to provide near-real-time, data-driven solutions for business. The company has no real competition -- at least not thus far -- and its system has become the gold standard for business and government customers alike.
Fears of a slowdown in AI adoption would spell bad news for Palantir, as the AI revolution is the catalyst behind the company's recent incredible growth. Nvidia's results put to rest -- at least for now -- fears of an AI slowdown.
That said, Palantir still fetches an enormous premium, selling for 165 times next year's expected earnings and 63 times expected sales. Any evidence of a deceleration in the adoption of AI, or any failure on Palantir's part to deliver, could send the stock careening lower, so let the buyer beware.
