Nvidia, Palantir, and the Great Valuation Tango

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Let me begin with a confession: I’ve spent far too much time this week staring at stock charts-specifically, those of Nvidia and Palantir. Hours logged so far: 14. Cups of coffee consumed while doing so: 5. Number of times I’ve muttered “What if?” to myself: uncountable.

Both companies are riding the AI wave like surfers who’ve just discovered they can actually stand up on their boards. But here’s the thing: one of them-Palantir-is being valued as though it’s already won the championship, while the other-Nvidia-is still treated like the underdog warming up on the sidelines. And by “treated,” I mean “valued.”

A Tale of Two Valuations

Let’s talk numbers, shall we? Because as a business historian (yes, that’s my official title, thank you very much), I find it both fascinating and slightly alarming how wildly different these two companies’ valuations are. It’s like comparing apples to… well, golden apples encrusted with diamonds.

Take price-to-book ratios, for instance. Palantir’s is an eyebrow-raising 62.7, which makes Nvidia’s 42.35 look downright modest. If Nvidia were suddenly handed Palantir’s valuation, its market cap would balloon from $4.3 trillion to around $6.3 trillion. Imagine that-an extra $2 trillion floating about like confetti at a ticker-tape parade.

But wait! There’s more. Let’s move on to sales because, honestly, who cares about book values anymore? Palantir trades at a dizzying 115 times sales, whereas Nvidia hovers closer to 26. Apply Palantir’s multiple to Nvidia, and suddenly we’re talking about a market cap nearing $19 trillion. That’s nearly half the global GDP, in case you were wondering.

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And then there’s the pièce de résistance: earnings multiples. Palantir’s trailing P/E ratio clocks in at a jaw-dropping 522.4. Nvidia’s? A comparatively pedestrian 49.6. Do the math-if Nvidia sported Palantir’s earnings multiple, its value would skyrocket to approximately $45 trillion. Yes, you read that correctly. Forty-five *trillion*. My calculator almost had a nervous breakdown over that one.

Oh, but I haven’t even mentioned EBITDA yet. No, no, don’t roll your eyes-it gets better. Palantir’s enterprise value-to-EBITDA ratio is a mind-boggling 612.3. Nvidia’s? Just over 15. Adjust Nvidia’s accordingly, and we’d be looking at a valuation of-brace yourself-$64.4 trillion. At this point, I’m starting to think we need a new unit of measurement. Maybe call it “one Nvidia”?

Why Doesn’t Nvidia Get the Palantir Treatment?

So why isn’t Nvidia basking in the same glow as Palantir? Surely, it must have something to do with growth rates, right? Well, not exactly. Nvidia’s revenue jumped 56% year-over-year last quarter, while Palantir managed a respectable-but-not-spectacular 48%. And though Palantir did outshine Nvidia in terms of net income growth (142% vs. 59%), it’s hardly enough to justify such a chasm in valuation.

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Here’s my theory, scribbled hastily in the margins of my notebook during another late-night research binge: Palantir has become a darling of retail investors. Brent Thill, an analyst at Jefferies, put it rather bluntly when he told CNBC, “[Palantir] is a retail-driven story. There’s not a single institutional investor I talk to that even talks about this.” Ah, yes-the cult of enthusiasm. How very human of us.

The Reverse Experiment

Now, let’s flip the script. What if Palantir traded like Nvidia? Would its shareholders still be sipping champagne and dreaming of private islands? Probably not. Depending on the metric used, Palantir’s market cap could plummet anywhere from 32% to 98%. Even the optimistic end of that range feels like a punch to the gut.

Units of Hope Dashed: Infinite. Minutes Spent Wondering If I Should Sell Everything and Become a Gardener: 27. Final Thought Before Bed: Markets are strange, aren’t they? 😊

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2025-09-04 12:09