For only the third time in the S&P 500's existence, Wall Street's benchmark index has rallied at least 15% for three consecutive years. These outsize returns for Wall Street from 2023 through 2025 come courtesy of the artificial intelligence (AI) revolution.
Empowering software and systems with the ability to make split-second decisions without the need for human oversight is a technological leap forward that can eventually add trillions to global gross domestic product (GDP). From a hardware and applications standpoint, no two AI stocks are leading the charge quite like Nvidia (NVDA 1.27%) and Palantir Technologies (PLTR +1.60%).
During Wall Street's three-year, AI-driven bull market, Nvidia has added more than $4.2 trillion in market value, while shares of Palantir have skyrocketed by more than 2,500%! They've arguably become the faces of the AI movement.
Image source: Getty Images.
But while their respective growth rates would suggest a fourth year of jaw-dropping gains may be in the cards, the actions of those who know Nvidia and Palantir best point to a different outcome in the new year.
Nvidia and Palantir possess sustainable moats
However, before making predictions about the future, it's important to understand how we got to the point where Nvidia and Palantir are, essentially, at or near the center of the AI universe on Wall Street.
The outperformance of both companies can be traced back to their well-defined sustainable moats.
For example, Nvidia's graphics processing units (GPUs) are the preferred option as the brains of AI-accelerated data centers -- and it's not even close. By some analyst estimates, Nvidia's Hopper (H100), Blackwell, and Blackwell Ultra chips account for 90% or more of the GPUs currently deployed in enterprise data centers.
No externally developed GPUs have come particularly close to matching the compute capacity of what Nvidia's GPUs bring to the table. Furthermore, CEO Jensen Huang has kept his company on an aggressive innovation timeline that'll see a new advanced chip introduced during the second-half of each year. Progressively faster and more efficient GPUs will make it virtually impossible for other chipmakers to go toe-to-toe with Nvidia in AI data centers.
NASDAQ: NVDA
Key Data Points
Nvidia's CUDA software platform has played a crucial role in its success, as well. This toolkit, which developers use to maximize the compute potential of their Nvidia GPUs, keeps clients loyal to the brand.
Meanwhile, Palantir Technologies is an AI-applications business that lacks a one-for-one replacement at scale.
Palantir's lead operating segment is Gotham, an AI-driven software-as-a-service platform that the U.S. government and its allies rely on for military mission planning and oversight, as well as data collection and analysis. Many of Palantir's government contracts span four or five years, leading to highly predictable operating cash flow and a sustainable (and transparent) double-digit growth rate.
The company's other core operating segment, Foundry, caters to businesses. Foundry is an AI- and machine learning-powered platform that helps companies understand their data to streamline their operations. As a newer platform, Foundry has the potential to deliver outsize sales growth throughout the decade.
Wall Street and investors have demonstrated a willingness to pay a premium for public companies with sustainable moats.
Image source: Getty Images.
The people who know Nvidia and Palantir best have a $3.3 billion warning for Wall Street in 2026
However, things don't always go the way that investors expect in the stock market. The actions of Nvidia's and Palantir's insiders in 2025 certainly raise some potential red flags for the new year.
An "insider" is a high-ranking company executive, member of the board of directors, or beneficial shareholder who may possess non-public information. For the sake of transparency and to follow all securities laws, insiders are required to file Form 4 with the Securities and Exchange Commission within two business days of buying or selling their company's stock.
Based on Form 4 filings in 2025, insiders at Nvidia and Palantir were decisive net sellers of their respective shares:
- Nvidia: $2,164,822,949 in net selling activity
- Palantir: $1,146,687,533 in net selling activity
Collectively, more than $3.3 billion worth of Wall Street's hottest AI stocks were sold by insiders last year.
NASDAQ: PLTR
Key Data Points
The asterisk that should be placed next to the aforementioned figure is that not all insider selling is necessarily bad news for investors. Since most executives and board members are compensated in the form of shares or stock options, they'll often sell a portion of their shares or exercise their options and subsequently sell the shares to cover their federal and/or state income tax liability. Tax-based selling isn't something Wall Street or investors should worry too much about.
At the same time, insider buying has been almost nonexistent for both companies. The last time an Nvidia executive or board member bought shares was over five years ago, in December 2020. Meanwhile, only one executive/board member at Palantir purchased shares last year.
Although several reasons exist to sell a stock, not all of which are nefarious, the only reason an insider would buy shares is if they believe the stock will head higher. The persistent lack of insider buying that we've observed with Nvidia and Palantir speaks volumes.
As we push ahead into 2026, keep in mind that no next-big-thing technology trend, for more than three decades, has avoided an early innings bubble-bursting event. While AI has been Wall Street's hottest trend for three years (and counting), AI isn't anywhere close to being a mature technology.
Furthermore, history has shown that price-to-sales (P/S) ratios above 30 for companies heralding the charge of a game-changing innovation aren't sustainable over long periods. Nvidia's P/S ratio briefly topped 30 in early November, while Palantir's P/S ratio is currently tipping the scales at 110!
The lack of insider buying, coupled with billions of dollars in annual insider selling, would appear to signal that neither Nvidia nor Palantir shares are attractive.
