As AI accelerates, analysts weigh in on the upside potential of chipmaker AMD and software firm Palantir
Two AI Giants, Two Different Paths
The AI boom is creating big opportunities across sectors — from silicon to software. Advanced Micro Devices (AMD) and Palantir Technologies (PLTR) are both riding this wave, but their business models are starkly different:
- AMD is a hardware-driven AI play, focusing on GPUs and chips powering data centers and AI infrastructure.
- Palantir is a software-first company, known for its AI-powered data analytics platforms used in government, defense, and now commercial sectors.
Both stocks have performed well in 2025 — but the real question for investors is which one has more room to grow, according to Wall Street.
AMD Expands Its AI Footprint with Hardware Deals
AMD stock is up 36% year-to-date, thanks to momentum in its Instinct MI300X GPU rollout. The company is pushing deeper into AI infrastructure:
- Partnered with IBM and Zyphra to bring AMD GPUs to IBM Cloud, marking its first full AI training cluster deployment.
- Teamed up with Tech Mahindra to embed its AI chips into hybrid cloud services for telecom, finance, and healthcare industries.
Q2 FY2025 earnings were mixed:
- Revenue jumped 32% year-over-year, pleasing the market.
- EPS was in line, missing the chance for a major beat.
Despite this, analysts are generally positive, giving AMD a Moderate Buy rating.
- Price target: $187.73
- Upside potential: About 14%
- Key strengths: AI and server chip gains
- Key risks: Trade tensions and intense chip competition
Palantir Gains Ground with AI-Powered Software
Palantir stock has soared 129% in 2025 — more than tripling AMD’s gain — thanks to rising adoption of its AI analytics tools.
- Still strong in defense and intelligence, Palantir is expanding into healthcare, energy, and finance.
- Secured a major U.K. government contract in September to expand AI use in military operations.
However, recent setbacks include:
- A critical Army memo labeling a joint system project with Anduril as “very high risk” due to alleged security concerns.
- Concerns over high valuation, even amid strong growth.
Q2 results were impressive:
- Revenue up 48% YoY, surpassing $1 billion for the first time.
- Raised 2025 revenue guidance to $4.142–$4.150 billion.
Wall Street is more cautious here, giving Palantir a Hold rating:
- Price target: $157.33
- Downside risk: About -9.09%
- Key strengths: Government contracts and growing commercial traction
- Key risks: Valuation pressure and execution challenges
Analyst Verdict: AMD Has the Edge
Using TipRanks’ Stock Comparison Tool, analysts lean toward AMD for higher upside:
- AMD: Moderate Buy | 14% upside
- Palantir: Hold | 9% downside
The takeaway? While both companies are vital to the AI ecosystem, Wall Street currently favors AMD’s scalable hardware growth and strong AI chip roadmap over Palantir’s high-flying — but more volatile — software-driven momentum.
Wall Street sees more upside in AMD, giving it a Moderate Buy with 14% growth potential, while Palantir receives a Hold due to valuation concerns despite strong revenue gains. Investors bullish on AI hardware may prefer AMD’s steadier trajectory.