Nvidia Is Soaring — The Big Question Is When Does Palantir’s Turn Come?

In case you missed it, shares of Nvidia (NASDAQ:NVDA | NVDA Price Prediction) finally broke out to hit new highs of $235 and change per share before pulling back slightly. It’s been a long time coming, and the upward move came as quite a surprise, as it wasn’t a blowout quarterly earnings reveal, another new circular deal or partnership, or even upbeat commentary from the great Jensen Huang; it was actually a surprising U.S. approval for Nvidia to sell some more of its older chips, the H200, to China.

And with explosive momentum spreading across the semiconductor market, perhaps it’s not all too big of a surprise to see the $5.45 trillion titan moving on from its fairly lengthy breather. It’s hard to tell what the next move for the semis will be and whether the $6 trillion market cap level can be breached as a part of this rally.

Palantir stock is in a tougher spot. Will it get its turn to turn?

But I do think that such a run has Palantir (NASDAQ:PLTR) investors wondering when Alex Karp’s empire will be stepping up to bat. Either way, running to the exits with a former AI high-flyer as it enters a pressured period might not be without its own share of upside risks.

In any case, Palantir stock was in a far tougher spot than Nvidia, given that the stock has been stuck in a bear market, rather than running sideways in a “sideways correction,” to speak. With that much negative momentum and the worry of a Michael Burry bearish bet, you can imagine how tough it can be to maintain conviction in a momentum trade that’s starting to look incredibly choppy.

Any way you look at it, shares of Palantir are running through their most challenging period to date. With an applause-worthy first quarter that was met with selling, it certainly feels like nothing can help the AI analytics titan reverse course.

Indeed, it felt like that for Nvidia for a while, which has also been knocking quarters out of the park for much of the year while unveiling profound innovations throughout the past year.

And while nobody knows what’s going to do it for Palantir (clearly, the stock needs more than an unbelievable quarter or insights from the great Alex Karp), I’m sure many are wondering if Michael Burry’s other bearish bet will keep gravitating lower or pivot and march toward new highs as Nvidia has.

A tale of two of Michael Burry’s bearish bets

In my view, the two Burry bearish AI-flavored bets couldn’t be more different. Nvidia is a GPU titan that’s actually quite cheap when you look at traditional valuation metrics. As for Palantir, the stock’s incredibly expensive and is in the AI software scene, which investors have turned against in recent months. While Palantir has a whole lot more to offer than just a “wrapper” around a model, the layer that Palantir sits at is growing quite uncertain.

Palantir might be one of one for now, but will that change in three years from now? It’s hard to tell. Burry’s bearish bet is enough to make me more cautious on the name compared to the likes of Nvidia, which looks as cheap as it is dominant, especially as the firm keeps adding to its ecosystem encompassing far more than just chips.

I guess it all comes down to whether data ontology will get its semi moment as we move further into the agentic AI age.

In any case, Palantir remains tougher to justify from a valuation standpoint, and until that changes, I’m not getting my hopes up for a reversal until there’s more certainty on just how much more of a gap Palantir can put between itself and the rest of software.

The “Rule of 40” score of 145% clearly wasn’t enough to justify that triple-digit price-to-earnings (P/E) multiple. With Palantir hovering just above a strong level of support in the $130 range, perhaps there’s some reason for optimism, even as recent rallies prove unsustainable.