But 2025 is turning out to be different for these red-hot growth stocks.

While Nvidia stock has retreated nearly 14% in 2025, Palantir has lost a lot of ground in recent days after a solid start to the year. However, it cannot be denied that both companies are on track to benefit from lucrative end markets. While Nvidia's recent results suggest that the fast-growing demand for AI hardware continues to be a key growth driver for the company, Palantir continues to witness an improvement in its growth profile thanks to the expanding need for generative AI software.

However, if you had to buy one of these two AI stocks right now, which one should you be putting your money on? Let's find out.

The case for Nvidia

The market has been doubting Nvidia's ability to sustain its healthy growth thanks to a variety of reasons ranging from export controls on its AI graphics processing units (GPUs) to a potential slowdown in AI infrastructure spending to threats from other types of chips such as custom processors that are being adopted by tech giants in a bid to lower their AI expenses.

However, the company's latest quarterly results make it clear that the demand for its AI chips remains healthy. Nvidia's revenue in the fourth quarter of fiscal 2025 (which ended on Jan. 26) increased a terrific 78% year over year to a record $39.3 billion. Adjusted earnings also increased by an impressive 71% to $0.89 per share. Both numbers were ahead of Wall Street's expectations.

The guidance indicates that Nvidia is on track to sustain its healthy momentum. It is expecting $43 billion in revenue in the current quarter, which would translate to a 65% increase from the prior-year period. However, Nvidia could exceed its own expectations as it ramps up the supply of its latest generation Blackwell processors to support the fast-growing customer demand.

More importantly, Blackwell can help Nvidia maintain its dominant position in the AI chip market thanks to its versatility. Management pointed out on the latest earnings conference call that "Blackwell addresses the entire AI market from pretraining, post-training to inference across cloud, to on-premise, to enterprise."