```json

Nvidia's AI Party: Palantir's Results Show It's Just Getting Started

The AI boom. We've heard it, we've seen the stock charts, and we've endured the relentless hype. But is it real, or just another tech bubble inflated by cheap money and wishful thinking? The performance of Nvidia (NVDA) has been the bellwether. A 13-fold increase in market cap to $5 trillion is nothing to sneeze at. But lately, some whispers have grown louder: is AI adoption slowing down?

Palantir's (PLTR) latest earnings report throws some cold water on that narrative. The data mining and AI specialist just posted Q3 revenue of $1.18 billion, up a blistering 63% year-over-year. Adjusted EPS? Up 110% to $0.21. Wall Street was expecting $1.09 billion in revenue and $0.17 EPS. Palantir didn't just beat expectations, they crushed them.

The AI Adoption Curve: Moving Downstream

The real story, though, lies beneath the headline numbers. Palantir's U.S. commercial segment, fueled by its Artificial Intelligence Platform (AIP), saw revenue jump 121% to $397 million. Customer count in that segment? Up 65%. Total contract value (TCV) exploded, up 342% to a record $1.3 billion. Remaining performance obligation (RPO), or backlog, jumped 66% to $2.6 billion. Those numbers suggest sustained, accelerating growth.

But let's think about where Palantir sits in the AI food chain. They aren't building the chips (that's Nvidia's domain). They aren't building the massive cloud infrastructure (think Amazon, Microsoft, Google). Palantir is selling AI solutions to enterprises – to businesses that need to make sense of their data and automate decisions. Their growth is an indicator that AI isn't just for tech giants anymore. It's filtering down to the broader economy.

This aligns with what Nvidia CEO Jensen Huang said at the recent GPU Technology Conference (GTC): Nvidia's backlog for Blackwell and next-generation Rubin chips has reached "half a trillion dollars so far." Half a trillion. That's not just a big number; it's an order-of-magnitude bigger than anyone expected. Palantir CEO Alex Karp Just Delivered Incredible News for Nvidia Stock Investors

Consider the capex plans of the "Four Horsemen" (Amazon, Microsoft, Alphabet, Meta). They're collectively planning to spend $380 billion this year on data centers, primarily to support AI. And they're saying that spending will increase in 2026.

Now, here's the critical question that no one seems to be asking: how much of that $380 billion is new spending, directly attributable to AI, versus simply a continuation of existing data center buildout plans? It's impossible to say for sure without access to their internal budgets, but it's a crucial distinction. If they were already planning to spend $300 billion on data centers regardless of AI, then the incremental impact of AI is "only" $80 billion. Still significant, but not quite as earth-shattering as the headline number suggests.

And this is the part of the report that I find genuinely puzzling. We're seeing massive investments in AI infrastructure. We're seeing surging demand for AI chips. We're seeing companies like Palantir report explosive growth in AI-related revenue. But are we seeing a corresponding increase in overall productivity? Are we seeing a measurable boost to GDP? Not yet.

There's a potential disconnect here. All this investment and activity should be translating into tangible economic benefits, but the data isn't there yet. It could be a matter of timing – it takes time for new technologies to be fully integrated and for their impact to be felt. Or it could be that we're overestimating the near-term potential of AI.

It's like the early days of the internet. Everyone knew it was going to be big, but nobody quite knew how it would play out, or which companies would ultimately win. There was a lot of hype, a lot of speculation, and a lot of money thrown around. Some companies thrived, others crashed and burned. The same could happen with AI.

The Nvidia Effect: A Rising Tide Lifts All Boats?

Nvidia, with its dominant 92% share of the data center GPU market (according to IoT Analytics), is the clear leader in this AI race. Their chips are the gold standard for both training and inference – the two key phases of AI development. The stock has soared 1,320% since the start of the AI boom in early 2023. At 31 times next year's expected earnings, Nvidia is trading at a premium. Is it justified?

Analysts estimate Nvidia's revenue will grow by 27% annually over the next five years. That's a hefty growth rate, but it's also a projection, not a guarantee. A lot can happen in five years.

And what about the competition? AMD is nipping at Nvidia's heels. New entrants are emerging. The AI chip market is far from a done deal. Nvidia may be the leader today, but that doesn't mean they'll be the leader tomorrow.

Palantir's results, coupled with Nvidia's backlog, do seem to dispel the notion that AI adoption is slowing. The evidence points to the opposite: demand for AI is booming.

Early Innings, But the Scoreboard is Still Unclear

The AI revolution is underway, but it's still early days. While Palantir's numbers are impressive, and Nvidia's backlog is staggering, the ultimate impact of AI on the broader economy remains to be seen. The hype is real, the investment is real, but the tangible results are still a work in progress.