Growth stocks helped the major indexes soar last year, and two in particular stood out. Nvidia (NASDAQ: NVDA) recorded the largest increase in the Dow Jones Industrial Average, and Palantir Technologies (NASDAQ: PLTR) were the best performers in the S&P 500. These players rose 171% and 340%, respectively.
Why did investors pile into these stocks? Both have benefited from the boom in artificial intelligence (AI). Nvidia dominates AI chip marketwhile Palantir uses AI as a key part of its software as a service platform. As a result, revenue in both companies increases.
After these successes, you might think it’s too late to take on these top AI players. But we’re really in the early days of the AI growth story, and these companies are well-positioned to benefit through the next chapters. Let’s take a closer look at these two growth stocks to buy in 2025.
First, a little background on this AI giant. Nvidia hasn’t always been associated with artificial intelligence. He was previously known for his work with the video game industry. The company’s graphics processing units (GPUs) led to the vibrant visuals that were key to great gameplay (and still do). But it soon became clear that GPUs could be useful in many other industries — so Nvidia developed the CUDA parallel computing platform to make this a reality.
Today, Nvidia serves a variety of industries — from healthcare to automotive — and its main focus is artificial intelligence. The data center business accounts for the lion’s share of revenue and looks like we have a lot more growth to come. Here’s why. Nvidia will continue to benefit from the ongoing AI infrastructure build, delivering GPUs and other products. For example, the US just announced a new $500 billion AI infrastructure project and named Nvidia as a key technology partner.
On top of that, Nvidia stands to gain from the next wave of AI growth: applying AI to real-world situations. Agentic AI — using AI agents to consider problems, brainstorm and implement solutions — is a big part of that, and Nvidia has already taken steps in this regard. The company offers blueprints for users to design their own AI agents.
So today, trading at 49 times earnings estimates, Nvidia looks reasonably valued and makes for an excellent buy for 2025 and beyond.
Twenty-year-old Palantir was once known for its contracts with governments, its largest group of customers. But recently a new driver of growth has emerged: the commercial customer. Palantir sells software that aggregates user data and helps use that data to make often game-changing decisions.
