Palantir Technologies (NASDAQ: PLTR), the data mining and analytics firm named after the all-seeing orbs from The Lord of the Rings, went public via a public listing just over five years ago. It opened at US$10 on the first day, but it now trades at around US$180.

Palantir dazzled the bulls with its accelerating revenue growth and soaring profits, but could it head even higher over the next five years? Let’s review its catalysts and challenges to find out.

What happened to Palantir over the past five years?

Palantir aggregates data from disparate sources like emails, databases, spreadsheets, and sensors. It cleans up all that information, analyzes it to spot trends, and organizes its findings on visual dashboards. It provides those services through two main platforms: Gotham for its government customers, and Foundry for its commercial customers.

Most U.S. government agencies already use Gotham. The military uses it to plan missions, and law enforcement agencies use it to track criminal investigations. Its uses are broad but divisive: It was reportedly used to find Osama Bin Laden in 2011, but it’s also being used by Immigration and Customs Enforcement (ICE) as a tracking tool.

Walmart, Amazon, and Apple use Foundry to optimize their supply chains, detect fraud, and analyze customer behavior. In the first half of 2025, Palantir generated 55% of its revenue from Gotham and the remaining 45% from Foundry. Here’s how those two core businesses fared over the past five years.

Data source: Palantir. YOY = year over year. 1H = first half.

Palantir got off to a great start, but its growth cooled off in 2022 and 2023 as it grappled with the uneven timing of its government contracts and macro headwinds for its commercial customers. That deceleration forced it to abandon its original goal for growing its annual revenue by at least 30% through 2025.

But over the past year and a half, its revenue growth accelerated again. Escalating geopolitical conflicts drove more government agencies to award Gotham with fresh defense contracts. Meanwhile, stabilizing inflation, declining interest rates, and a rush toward AI upgrades also prompted more companies — especially in the U.S. — to ramp up their spending on Foundry’s services. It also rolled out more AI applications to support the development of customized AI services.

Palantir turned profitable on a generally accepted accounting principles (GAAP) basis in 2023, and its net income more than doubled year over year in both 2024 and the first six months of 2025. Those soaring profits — which can be largely attributed to its improving scale, its resilient pricing power, and a significant reduction in its stock-based compensation expenses — led to its inclusion in the S&P 500 and Nasdaq-100 last year.

What will happen to Palantir over the next five years?

From 2024 to 2027, analysts expect Palantir’s revenue and GAAP earnings per share (EPS) to grow at a compound annual growth rate (CAGR) of 38% and 63%, respectively. Its biggest potential catalysts include a new US$10 billion contract with the U.S. Department of Defense, its plans to build a “Golden Dome” missile defense system for the U.S. through partnerships with Anduril Industries and Microsoft, its ongoing expansion into Europe, and the robust growth of its U.S. commercial business.

But at US$178 per share with a market cap of US$444 billion, Palantir stock trades at 323 times next year’s earnings and 79 times next year’s sales. Those meme stock valuations could cap its upside potential and set it up for a steep drop in the next market downturn.

Let’s assume Palantir matches analysts’ estimates through 2027 and grows its EPS at an impressive CAGR of 30% from US$0.83 in 2027 to US$2.37 in 2031. If it’s trading at a more reasonable (but still generous) 50 times forward earnings by the beginning of 2031, its stock price would actually decline about 34% to US$118 over the next five years.

So while Palantir’s business is still firing on all cylinders, investors shouldn’t pay the wrong price for the right company. If you want to hold Palantir’s stock for at least the next five years, it’d be smarter to wait for its current bubble to pop and accumulate its shares at a much lower price.

The post Where Will Palantir Stock Be in 5 Years? appeared first on The Motley Fool Canada.

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Fool contributor Leo Sun has no position in any of the stocks mentioned. The Motley Fool recommends Palantir Technologies. The Motley Fool has a disclosure policy.

If you had invested $5,000 in Nvidia (NASDAQ: NVDA) 10 years ago, your investment would be worth more than $1.24 million today. The chipmaker minted a lot of millionaires, as its sales of gaming and data center graphics processing units (GPUs) skyrocketed.

But with a market cap of $2.9 trillion, Nvidia is now the third-largest publicly traded company in the world after Apple and Microsoft. Could it turn a new $5,000 investment into $1 million again over the next 10 years?

Why did Nvidia’s stock soar?

Nvidia is the world’s largest producer of discrete GPUs for high-end PCs and servers. Its GPUs can be used to process high-end graphics in video games, power photo and video editing software, mine cryptocurrencies, and process complex artificial intelligence (AI) tasks.

In the past, Nvidia generated most of its revenue from the PC market. But over the past few years, its data center business eclipsed its PC gaming business as companies scrambled to upgrade their servers to handle new AI applications. All of the world’s leading AI companies — including Microsoft, OpenAI, and Alphabet‘s Google — now use Nvidia’s chips.

From fiscal 2014 to fiscal 2024 (which ended this January), Nvidia’s revenue grew at a compound annual growth rate (CAGR) of 31% as its earnings per share (EPS) rose at a CAGR of 50%. Some of that growth was initially driven by the expansion of its gaming GPU business (which was aided by the booming crypto mining market), but the data center business eventually became its core growth engine. That’s why Nvidia’s growth accelerated significantly in fiscal 2024 as the AI market exploded.

Data source: Nvidia. Chart by author.

From fiscal 2022 to fiscal 2024, the percentage of Nvidia’s revenue that came from data center chips doubled from 39% to 78%. That ratio rose to 87% in the first half of fiscal 2025 — so it’s becoming an all-in play on AI-oriented data center chips.

What are the bull and bear cases for Nvidia?

The bulls believe Nvidia’s growth spurt will continue as the market’s demand for new AI chips outstrips supply. They believe the company’s gross margins — which rose from 62% in fiscal 2020 to 72.7% in fiscal 2024 — will continue to grow as it exercises nearly unmatched pricing power in the booming market. They also say the company’s stock looks reasonably valued at 32 times next year’s earnings.

The bears expect Nvidia’s growth to cool as the AI hype dies down, cheaper competitors like AMD gain ground, and tighter export curbs throttle its sales to China. Many of Nvidia’s top customers have also been developing their own AI accelerator chips to reduce their long-term dependence on the chipmaker.

They’ll also note that Nvidia’s insiders sold 10x as many shares as they bought over the past 12 months — so its upside potential might be limited.

Could Nvidia generate millionaire-making gains in 10 years?

From fiscal 2024 to fiscal 2027, analysts expect Nvidia’s revenue and EPS to grow at a CAGR of 50% and 56%, respectively. Most of that growth should be driven by the red-hot generative AI market, which Fortune Business Insights estimates will grow at a CAGR of 40% from 2024 to 2032.

If Nvidia matches Wall Street’s expectations, grows its EPS at a slower CAGR of 30% from fiscal 2027 to fiscal 2035, and still trades at 30 times earnings, its stock price could rally 840% to $1,110 and lift its market cap to $27 trillion by 2034.

But even in that bullish best-case scenario, Nvidia would only turn a $5,000 investment into $47,000. To make $1 million again, you would need to invest about $106,000 today. Therefore, Nvidia might still help you become a millionaire if you can afford to invest that much cash in a single stock — but it probably won’t replicate its gains from the past 10 years.

In reality, Nvidia’s growth could cool over the next decade as the AI market matures and new competitors carve up the market. Its growth could possibly be hampered by a global recession or other unpredictable macro or regulatory headwinds. Investors should keep all those risks in mind instead of assuming Nvidia’s hot stock will continue its historic rally.

The post Could Nvidia Stock Help You Become a Millionaire? appeared first on The Motley Fool Canada.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Leo Sun has positions in Apple. The Motley Fool recommends Advanced Micro Devices, Alphabet, Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

Shares of Meta Platforms (NASDAQ: META) and Snap (NYSE: SNAP) went in opposite directions after their latest earnings reports. Meta’s stock rose 5% on Aug. 1 after its second-quarter report easily cleared analysts’ estimates on the top and bottom lines. Snap’s stock plunged 16% on the same day as its fourth-quarter revenue landed below analysts’ expectations and its adjusted earnings merely matched the consensus forecast.

Over the past three years, Meta’s stock has risen nearly 40% as Snap’s stock plunged more than 80%. So will the social media leader continue to crush the struggling underdog?

Which company is gaining more users?

Meta is the world’s largest social media company. It ended the second quarter of 2024 with 3.27 billion daily active people (DAP) across its “family” of apps (Facebook, Instagram, Messenger, and WhatsApp), up 7% from a year earlier.

Snap carved out a niche among younger users with its ephemeral messages and augmented reality filters. Its total number of daily active users (DAUs) grew 9% year over year to 432 million in the second quarter of 2024.

Over the past year, Meta’s DAP growth has remained remarkably stable — but Snap’s DAU growth decelerated and dropped to the single digits in its latest quarter. At this rate, Snap could eventually grow its daily audience at a slower rate than Meta.

Data source: Quarterly earnings reports. YOY = year over year.

Which company is generating stronger revenue growth?

Meta and Snap both generate most of their revenue from ads. But over the past year, Meta grew its revenue at a much faster rate than Snap even though it was gaining daily active users across its apps at a slower clip than Snapchat.

Data source: Quarterly earnings reports.

For the third quarter, Meta expects its revenue to rise 13% to 20% year over year while Snap anticipates 12% to 16% growth. It’s usually a red flag when the underdog is growing at a slower rate than the market leader.

Meta has been growing faster than Snap because Meta is attracting more spending from Chinese e-commerce and gaming companies (which are targeting overseas consumers), simultaneously growing its ad prices and ad impressions, expanding its Reels short video platform to counter TikTok, and gathering more first-party data with its AI-powered algorithms to counter Apple‘s disruptive privacy changes on iOS.

Snap didn’t attract the same interest from Chinese advertisers, its Spotlight video platform didn’t gain much traction against Reels and TikTok, and its ad prices fell even as its total number of ad impressions increased. Snap is also relying too heavily on its overseas users — who generate a fraction of the ad revenues of its North American users — to drive its DAU growth.

Which company is more profitable?

Meta is consistently profitable on a generally accepted accounting principles (GAAP) basis, even though it’s subsidizing the expansion of its unprofitable Reality Labs division (which produces its VR and AR devices) with its higher-margin ad revenues. Snap is still unprofitable on a GAAP basis, and it’s expected to stay in the red for the foreseeable future.

Data source: Quarterly earnings reports. GAAP basis.

For the full year, analysts expect Meta’s operating margin to expand 4 percentage points to 39%, and for Snap’s operating margin to improve about 12 percentage points to negative 18%. That would represent a step in the right direction for Snap, but the company is still plowing a lot of cash into buybacks to offset the dilution from its stock-based compensation. That’s not a good look for an unprofitable company with negative cash flows.

Over the past five years, Snap’s number of outstanding shares actually increased by 18%. Meta, which launched a $50 billion buyback plan earlier this year, reduced its number of outstanding shares by 11% during the same period.

The valuations and verdict

Meta trades at 25 times forward earnings, which makes it the second-cheapest “Magnificent Seven” stock after Alphabet. Snap can’t be valued by its GAAP earnings, but it trades at 58 times forward non-GAAP earnings — which exclude the stock-based compensation and other one-time expenses.

The choice between Meta and Snap is a simple one. Would you rather invest in the world’s largest social media company, which is still growing even though it already serves about 40% of the world’s population, or the niche underdog that is trying to keep pace with its nimbler competitors as it torches tens of millions of dollars each quarter? Meta’s stock is also cheaper relative to its growth potential — so it should easily stay ahead of Snap for the foreseeable future.

The post Better Social Media Stock: Meta Platforms vs. Snap appeared first on The Motley Fool Canada.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Leo Sun has positions in Apple and Meta Platforms. The Motley Fool recommends Alphabet, Apple, and Meta Platforms. The Motley Fool has a disclosure policy.