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UBS Favors AMD Over Palantir in AI Stock Showdown Post-Earnings

by Crypto Hobby

Updated August 10, 2025

In the rapidly expanding artificial intelligence sector, UBS analysts have weighed in on two prominent companies, Palantir Technologies (PLTR) and Advanced Micro Devices (AMD), following their recent earnings reports.

The analysis aims to identify which of these AI-focused stocks presents a superior investment opportunity for investors navigating the burgeoning AI market.

The Booming AI Landscape

The artificial intelligence industry is experiencing significant growth, with an increasing number of businesses integrating AI into their operations.

This trend has propelled the AI market from a valuation of $233 billion last year to an estimated $294 billion this year, with projections indicating a compound annual growth rate of 29.2% through 2032, reaching $1.77 trillion.

North American companies, particularly those in the U.S., are leading this charge, holding nearly 33% of the market share in 2024.

Palantir: Data Analysis Powerhouse

Palantir, a leader in data analysis, has developed its AI Platform (AIP), which combines AI technology with human intuition.

This platform is designed to enhance data analysis outcomes and features a user-friendly interface that allows natural language interaction, eliminating the need for coding knowledge.

Palantir's solutions have found significant traction within government sectors, notably the Department of Defense, with recent contracts and partnerships aimed at accelerating defense production and digital transformation.

In its second quarter of fiscal year 2025, Palantir reported strong financial results, including a 48% year-over-year increase in revenue to $1.004 billion, marking its first billion-dollar quarter.

Non-GAAP earnings per share were 16 cents, exceeding expectations.

The company's stock has seen substantial gains, up 147% year-to-date.

Despite the impressive performance, UBS analyst Karl Keirstead maintains a Neutral rating on Palantir, citing its high valuation of 136x CY26E Free Cash Flow as a key concern.

The broader market consensus also leans towards a Hold rating, with an average price target suggesting a potential downside.

Advanced Micro Devices: Semiconductor Contender

Advanced Micro Devices (AMD) is a significant player in the semiconductor industry, competing in the AI accelerator market against NVIDIA and in the CPU market against Intel.

With a market capitalization nearing $280 billion, AMD offers a diverse product portfolio that includes solutions for PCs, gaming, and the AI/data center market.

AMD's recent quarterly report showed a 32% increase in overall revenue to $7.685 billion, driven by strong performance in AI/data center sales, which grew 14% year-over-year, and gaming revenue, which surged 73%.

The company anticipates approximately $8.7 billion in revenue for the third quarter.

UBS analyst Timothy Arcuri holds a positive outlook on AMD, assigning a Buy rating with a price target of $210, indicating a potential 21.5% upside. Arcuri highlights AMD's competitive positioning in both the data center GPU and CPU markets, as well as its improving gross margins.

The Street's consensus for AMD is a Moderate Buy, supported by a majority of analysts recommending the stock, with an average price target suggesting a modest upside.

Key Takeaways

Palantir (PLTR): Strong revenue growth and market position, but high valuation raises concerns for UBS, leading to a Neutral rating.
Advanced Micro Devices (AMD): Robust performance in AI and CPU segments, with UBS analyst recommending a Buy rating due to competitive advantages and positive outlook.
Market Sentiment: While Palantir faces valuation hurdles, AMD is viewed more favorably by analysts for its growth potential in key AI markets.