Nebius vs. Palantir: At >100x Sales, Which AI Stock Is The Better Buy?

The AI investment frenzy of 2025 has pushed valuations to stratospheric levels, with Nebius Group (NBIS) and Palantir Technologies (PLTR) trading at multiples exceeding 100x sales. Yet, beneath the hype, the two companies diverge sharply in their business models, growth trajectories, and long-term infrastructure positioning. For investors weighing which AI stock offers a more realistic path to sustained value creation, a granular analysis of their financials, strategic partnerships, and technological roadmaps is essential.

Valuation Realism: Growth vs. Profitability

Nebius Group's valuation appears anchored to explosive growth. The company's EV/Sales multiple of 141.3x is steep but arguably justified by its 545% revenue surge in the first half of 2025, reaching $156 million, and a Q2 2025 revenue jump of 625% year-on-year to $105.1 million Nebius reports second quarter financial results and raises ARR guidance for 2025^[1]. While its core AI infrastructure business turned positive on Adjusted EBITDA ahead of schedule, the broader group remains unprofitable, with LTM EBITDA at -$127 million Nebius Group - Public Comps and Valuation Multiples^[2]. This reflects heavy reinvestment in data center expansion, including a target of 1 gigawatt of power capacity by 2026 to support next-generation NVIDIA Blackwell GPUs Nebius Group NV (NBIS) Q2 2025 Earnings Call^[3].

Palantir, by contrast, trades at a far more inflated EV/EBITDA of 607x–681x and a P/E ratio of 580x (trailing) Palantir - Public Comps and Valuation Multiples^[4]. These multiples strain credulity given its $1.7 billion in free cash flow over the last 12 months. Yet, Palantir's Q2 2025 results—$1.004 billion in revenue, 48% year-on-year growth, and a 57% free cash flow margin—suggest its Rule of 40 score of 94% (combining growth and profitability) is a rare strength Palantir Reports Q2 2025 U.S. Comm Revenue Growth of 93% Y/Y and Revenue Growth of 48% Y/Y^[5]. The question remains whether its current valuation, exceeding $412 billion, is justified by its AI platform's incremental value in enterprise markets At $412 Billion, Palantir Is Valued Like It Invented Time Travel^[6].

Infrastructure Positioning: Scaling the Cloud vs. Enterprise Integration

Nebius's long-term strategy hinges on dominating the AI infrastructure layer. Its partnership with Microsoft—a $17.4 billion agreement to deliver AI infrastructure from a new Vineland, New Jersey, data center—positions it to capitalize on surging demand for cloud-based AI workloads Nebius announces multi-billion dollar agreement with Microsoft …^[7]. The company's exclusive access to NVIDIA Blackwell GPUs and its plan to secure 1 gigawatt of power by 2026 underscore its focus on raw computational capacity Nebius Group: The AI Infrastructure Powerhouse Unleashed …^[8]. This infrastructure-centric approach mirrors Amazon Web Services' playbook, targeting developers and enterprises needing scalable AI training and inference capabilities.

Palantir, meanwhile, has pivoted to becoming an AI integration platform. Its Foundry and Gotham tools are now augmented by AI FDE (Feature Engineering and Deployment Engine) and Ontology-as-Code, enabling clients to automate workflows and derive insights from complex datasets Palantir Q2 2025 slides: revenue tops $1B, Rule of 40 score hits 94%^[9]. Strategic partnerships with Databricks, Boeing, and TWG Global highlight its emphasis on embedding AI into existing enterprise ecosystems. For instance, its collaboration with Databricks allows joint customers like the U.S. Department of Defense to deploy AI applications with reduced total cost of ownership Palantir and Databricks Announce Strategic Product Partnership^[10]. However, Palantir's lack of a proprietary AI chip or cloud infrastructure exposes it to competition from vertically integrated rivals like Google and Microsoft.

Strategic Risks and Rewards

Nebius's aggressive expansion carries execution risks. Its reliance on NVIDIA's GPU roadmap and the success of its Microsoft partnership are critical. If demand for AI cloud services softens or supply chain bottlenecks persist, its 2025 ARR guidance of $1 billion could face downward pressure. Conversely, Palantir's high valuation assumes its AI platform remains indispensable in a market increasingly saturated with open-source and cloud-native solutions. Its profitability, while robust, may struggle to justify multiples if enterprise clients shift to cheaper alternatives.

Conclusion: The Better Buy for the Long Term

For investors prioritizing valuation realism, Palantir's profitability and diversified enterprise client base offer a margin of safety despite its lofty multiples. Its Rule of 40 score and recurring revenue model suggest sustainable value creation. Nebius, however, is a high-conviction play on the AI infrastructure boom, with its Microsoft partnership and Blackwell GPU access providing a defensible moat. While its negative EBITDA and capital-intensive growth model are risks, the company's ability to outperform even Nvidia in 2025 underscores its potential to redefine the AI cloud landscape.

In the end, the choice between Nebius and Palantir depends on one's risk tolerance and time horizon. For those betting on the next phase of AI infrastructure scaling, Nebius's aggressive expansion and strategic alliances make it the more compelling long-term buy. For investors seeking a balance of growth and profitability, Palantir's enterprise AI dominance offers a more tempered but resilient opportunity.