Palantir CEO Alex Karp Just Delivered Incredible News for Nvidia Stock Investors

Palantir Technologies (PLTR) reported robust Q3 results, with revenue surging 63% year-over-year to $1.18 billion and adjusted EPS up 110%, significantly exceeding analyst estimates, driven by strong growth in its U.S. commercial AI platform. This performance, alongside Nvidia's (NVDA) reported half-trillion-dollar chip backlog and major tech companies' escalating AI-related capital expenditures, suggests that AI adoption is accelerating and becoming increasingly mainstream, countering recent concerns about deceleration. Nvidia, holding a dominant 92% share of the data center GPU market, is well-positioned to capitalize on this expanding AI demand as the foundational technology provider.

Analysis

Palantir Technologies (PLTR) reported Q3 revenue of $1.18 billion, a 63% YoY increase, and adjusted EPS of $0.21, up 110%, significantly exceeding analyst consensus. This strong performance was fueled by its U.S. commercial segment, where Artificial Intelligence Platform (AIP) revenue surged 121% to $397 million, marking its ninth consecutive quarter of acceleration and expanding its customer base by 65%. The company's remaining performance obligation (RPO) also increased 66% to $2.6 billion, indicating strong future growth.

These robust results, coupled with Nvidia's (NVDA) reported half-trillion-dollar chip backlog, dispel recent concerns about AI adoption deceleration. Major tech companies, including Amazon, Microsoft, Alphabet, and Meta, plan to collectively spend $380 billion on AI-related data center capital expenditure this year, with further increases projected for 2026. This significant investment confirms sustained, high-level demand for AI infrastructure.

The article suggests AI adoption is moving downstream from tech leaders to broader enterprise-level businesses, directly benefiting Nvidia, which commands a dominant 92% share of the data center GPU market. Nvidia's chips are the industry standard for AI training and inference, positioning it as a foundational "picks-and-shovels" play. Despite a 1,320% stock rally since early 2023, its 31x next year's earnings valuation is considered reasonable given projected 27% annual revenue growth over five years, indicating a substantial growth runway.

Key Decisions for Investors

• Investors should consider Palantir's strong commercial AI platform growth and increasing RPO as indicators of sustained demand for enterprise AI solutions.
• Monitor Nvidia's continued market dominance and substantial backlog as a key indicator of broader AI infrastructure spending and adoption trends across industries.
• Evaluate the implications of major tech companies' escalating AI-related capex for the entire AI supply chain, particularly for foundational technology providers.
• Assess whether current valuations for AI leaders like Nvidia remain justified by their long-term growth prospects, considering the expanding AI adoption beyond initial tech giants.