Two Hot Growth Stocks to Consider in 2025

Last year, growth stocks played a significant role in boosting major stock market indexes, and among them, two companies particularly shone. Nvidia ( NVDA ) saw the largest increase within the Dow Jones Industrial Average, while Palantir Technologies ( PLTR ) achieved the best performance in the S&P 500.

Nvidia's stock soared an impressive 171%, whereas Palantir's growth was even more remarkable at 340%. So, what sparked this investor interest in these stocks?

Both companies have gained significantly from the booming field of artificial intelligence (AI). Nvidia is a leader in the AI chip sector, supplying the graphics processing units (GPUs) that are essential for AI applications. On the other hand, Palantir incorporates AI into its software-as-a-service (SaaS) offerings, which are designed to help businesses make informed decisions based on their data.

You might think that it’s too late to invest in these outstanding AI companies, but we are still in the early stages of AI’s growth potential. Both Nvidia and Palantir are well-positioned to capitalize on the continuing opportunities that lie ahead. Let's explore these two high-potential growth stocks that remain top picks for 2025.

Nvidia

Nvidia has built its reputation as an AI powerhouse over the years. Initially, it was focused primarily on the gaming industry, creating GPUs that enhanced the experience of video games. However, it quickly became evident that these powerful chips had applications in numerous other sectors.

Now, Nvidia’s primary focus is on AI, and its data center business forms a large portion of its revenue. There’s tremendous growth potential ahead, especially given the recent announcement of a major $500 billion AI infrastructure project in the U.S., which has identified Nvidia as a key partner.

Additionally, Nvidia is poised to take advantage of the next wave in AI development—using AI to solve real-world challenges. The company has already initiated projects involving Agentic AI, where AI agents are employed to think through problems, reason, and devise solutions. For these reasons, with a forward price-to-earnings ratio trading at around 49, Nvidia is seen as a valuable growth investment for 2025 and beyond.

Palantir Technologies

In its 20 years of operation, Palantir was primarily known for its government contracts, which constituted its main source of revenue. Recently, however, a new growth avenue has opened through commercial clients. Palantir offers software that compiles and analyzes customer data to support critical decision-making.

A significant innovation for Palantir has been its Artificial Intelligence Platform (AIP), launched just over a year ago, which has helped shift the company’s focus toward commercial business. This integration of AI into data processes has led to a surge in commercial clients—from about 14 just four years ago to nearly 300 today.

The good news continues, as Palantir’s government revenue also shows strong growth, implying that the company now benefits from two powerful growth segments. For instance, recent reports indicated that both government and commercial revenues have climbed substantially, resulting in Palantir achieving its highest profit to date.

Since AIP is still in the early stages and commercial clientele continues to expand, it leaves plenty of room for future growth. Moreover, the overall AI market, which is currently worth $200 billion, is projected to exceed $1 trillion by the end of this decade.

Although Palantir’s forward price-to-earnings ratio stands at a high 165, its forward price/earnings-to-growth (PEG) ratio of 0.3 illustrates that it is relatively affordable when considering growth potential. Metrics above 1 typically hint at overvaluation, making Palantir a compelling option for growth investors heading into 2025.

Growth, Stocks, AI