Two years ago, Wall Street embarked on a journey of unprecedented growth, as the S&P 500 index surged over 60% since the infamous closing low back on Oct. 12, 2022. This bullish run, driven by a robust U.S. economy and the dawn of artificial intelligence (AI), has reshaped the financial landscape like never before. The AI frenzy that swept markets continues to fuel optimism, with expectations running high for even greater gains heading into the upcoming months.

The allure of AI lies in its tangible applications, capable of enhancing operational efficiency and minimizing expenses across multiple industries. Notably, two standout performers in the S&P 500 index are NVIDIA Corporation (NVDA) and Palantir Technologies Inc (PLTR) – firms that have harnessed the power of AI to propel their stocks to new heights.

NVIDIA, with its cutting-edge GPU technology, sits at the core of AI infrastructure, supporting large language models and AI frameworks. Meanwhile, Palantir’s AI software has garnered widespread acclaim, notably through its successful Artificial Intelligence Platform (AIP).

Over the past two years, NVIDIA and Palantir have witnessed astronomic growth of 1002% and 433.9%, respectively, reflecting the potent impact of the AI revolution on their market performance. With the AI wave still gathering momentum, these tech giants are primed for further appreciation in the foreseeable future.

Let’s delve into the drivers

Despite headwinds such as restricted U.S. chip exports, NVIDIA remains buoyed by robust demand for its Blackwell chips. CEO Jensen Huang’s remarks on the insatiable market appetite for Blackwell chips underscore the intense interest from key players like Microsoft, Alphabet, and Meta Platforms.

Furthermore, NVIDIA’s dominant position in the GPU market – accounting for over 80% market share and poised for exceptional growth – firmly positions the company for continued success. With developers favoring NVIDIA’s CUDA software over competitors, the outlook remains promising, mirrored by a 72.4% surge in the Zacks Consensus Estimate for NVIDIA’s earnings per share compared to a year prior.

Palantir’s ascent is underscored by its significant presence in government contracts, leveraging its software to streamline data aggregation processes and enhance operational efficiency. Recent financial results indicate a shifting trend towards commercial customers, mainly propelled by the lauded launch of AIP.

The substantial growth in U.S. commercial revenues and customer base underscores Palantir’s expanding market reach and the indomitable appeal of AIP. With traditional government revenues also on an upward trajectory, Palantir stands poised for substantial long-term growth, particularly as the AI market approaches the trillion-dollar mark over the next decade.

Amidst the recent Federal Reserve’s decision to slash interest rates, NVIDIA and Palantir find themselves in a favorable position, benefitting from reduced borrowing costs and bolstered profit margins. The rate cuts not only support cash flow dynamics critical for growth initiatives but also set the stage for sustained market appreciation.

Analysts’ optimistic price targets echo the sentiment, predicting substantial upside potential for both NVDA and PLTR stocks. At a time when robust growth and market dominance are hallmarks of these tech players, the road ahead seems paved for continued success.

NVIDIA’s current Zacks Rank of #2 (Buy) and Palantir’s #3 (Hold) position reflect market sentiments, pointing towards a positive trajectory for both stocks. With forecasts hinting at a bright future, investors look primed to capitalize on the AI-driven resurgence propelling these companies towards sustained growth.