Prediction: This Artificial Intelligence Data Center Stock Will Be Worth More Than Palantir by 2030
Palantir Technologies is the top S&P 500 stock with an 82% surge this year, inspiring analysts to project a possible trillion-dollar market cap. However, concerns over its high valuation hint at potential pullbacks. Emerging contender CoreWeave, specializing in AI infrastructure, may outpace Palantir in growth, with predictions indicating it could generate more revenue soon. Despite CoreWeave’s soaring stock price, a more cautious approach to investment is advised.
In 2025, tech stocks have been on a rollercoaster ride, reacting sharply to shifting economic news and speculation. However, one standout is Palantir Technologies. With a staggering 82% surge in its stock price this year alone, Palantir has claimed the title of top performer in the S&P 500 index. While some investors may feel uneasy about this sharp rise, bullish analysts like Dan Ives believe Palantir could soon join the prestigious trillion-dollar club by decade’s end.
That said, I find myself in a different camp. The stock currently trades at valuation multiples reminiscent of the late 90s dot-com bubble. It’s my belief that Palantir could face a substantial normalization in its valuation soon. In contrast, a lesser-known player, CoreWeave—a rising infrastructure service provider—looks poised to emerge as a major contender in the artificial intelligence (AI) space.
Palantir’s notable rise began in April 2023, following the launch of its Artificial Intelligence Platform (AIP). This platform caters to both public and private sectors, with partnerships like the U.S. Military among its biggest. What sets AIP apart from other data analytics tools is its ability to aid enterprises in constructing detailed ontologies. This intricate mapping illustrates various business facets, helping executives simulate different scenarios based on real-time data, thus enhancing decision-making.
As AIP gains traction, Palantir has significantly broadened its customer base, tapping into commercial sectors that were previously an afterthought. Graphs indicate a faster growing commercial customer count compared to the overall growth of the company, hinting that AI-focused software has captured vital interest in recent years. Regardless, I lean toward believing that CoreWeave’s prospective growth is more substantial than Palantir’s.
CoreWeave offers cloud-based infrastructure, primarily providing access to Nvidia’s graphics processing units (GPUs). To highlight the demand for AI chip access, McKinsey & Company projects that a whopping $6.7 trillion will be dedicated to AI infrastructure by 2030—most of it directed toward chips for data centers. In this scenario, software enhancement plays a role as only the beginning phase of a broader investment strategy in the tech space.
Top spenders in AI—companies like Microsoft, Amazon, and Alphabet—are expected to pivot toward investing in the infrastructure. CoreWeave has a foot in the door with several of these key players and I see rising infrastructure spending as a promising indicator for the firm.
Looking at Wall Street’s outlook, charts reveal consensus on revenue and earnings estimates for both Palantir and CoreWeave over the coming years. CoreWeave is actually on pace to generate more revenue than Palantir this year, even as Palantir’s market cap stands at a colossal $326 billion, nearly four times that of CoreWeave. Analysts suggest CoreWeave may triple its revenue and reach profitability within two years while Palantir’s growth seems stagnated.
Overall, the trends supporting AI narratives appear more favorable to CoreWeave in the long run. With GPU technologies continuing to advance and consistent investment from cloud giants, CoreWeave could significantly outstrip Palantir’s performance in terms of growth. At some point, the actual growth figures for Palantir may reveal a sobering reality that investors have overlooked until now, possibly triggering a sell-off.
Right now, while I am optimistic about CoreWeave’s future, I believe the stock is currently overbought given its recent meteoric rise post-IPO—almost 300% up, which feels more like meme stock behavior. A safer approach would be to look for a more reasonable entry point to start acquiring shares. Still, the outlook for CoreWeave looks bright, and I expect its valuation to steadily climb faster than that of Palantir over the next five years.
In summary, Palantir Technologies has seen significant stock performance, garnering analyst hopes for a trillion-dollar valuation. However, concerns about overvaluation loom large, with predictions of normalization on the horizon. In contrast, CoreWeave appears to be positioned for more sustainable growth, leveraging the booming AI infrastructure market. While CoreWeave’s stock may be overbought currently, its long-term prospects seem promising, potentially outpacing Palantir in the near future.
Original Source: www.fool.com
