Palantir Technologies (NYSE: PLTR) just had a historic moment. Following a blowout earnings report, the data analytics company crossed the $200 billion market capitalization mark for the first time on Tuesday. By the end of the day, its valuation stood at $236.5 billion, surpassing industry giants like Adobe, Shopify, and ServiceNow. The rapid surge in valuation now places Palantir just behind Salesforce (NYSE: CRM), the largest U.S.-based software-as-a-service (SaaS) company by market cap.
A New Software Titan in the Making?
Palantir and Salesforce operate on different scales, but the gap is closing. While Salesforce remains the larger company in terms of revenue, its growth rate has slowed to single digits for the first time. Meanwhile, Palantir’s revenue growth has accelerated for six consecutive quarters, fueled by strong adoption of its artificial intelligence platform (AIP) across both government and commercial sectors.
Palantir has something unique going for it—minimal direct competition in AI-driven analytics. The company claims that its biggest competitor isn’t another software firm but rather the internal development teams of its potential clients. That competitive moat is proving to be an asset, as businesses struggle to replicate the kind of solutions Palantir provides.
AI-Fueled Growth vs. Market Maturity
Salesforce has also made strides in AI with its Agentforce platform, but the impact on its revenue remains to be seen. Palantir, on the other hand, is already demonstrating the efficiency of its AI-driven automation tools.
For example, the company recently revealed that its AIP is helping banks cut back-office processing times from five days to under three minutes. Those efficiency gains are hard to ignore. In contrast, while Salesforce is integrating AI into its offerings, its business model is far more established, with over 150,000 customers.
Palantir’s AI dominance isn’t just about speed—it’s about differentiation. The company’s deep ties with government agencies have given it a foothold in areas where other SaaS companies have struggled to gain traction. The question now is whether its commercial expansion will be as successful as its work with the U.S. government.
Revenue Still Trails Behind the Leaders
Palantir’s valuation may be climbing fast, but its revenue still lags far behind Salesforce. Here’s a breakdown:
| Company | Market Cap | Revenue (TTM) |
|---|---|---|
| Salesforce | $355B | $35.5B |
| Palantir | $236.5B | $3.5B |
Despite Palantir’s rapid growth, Salesforce’s revenue is still more than 10 times larger. That’s a massive gap, which raises a critical question: Can Palantir justify its valuation over the long term?
While there’s no strict limit on how big a software company can grow, history suggests that companies valued at ultra-high multiples eventually face a reckoning. Palantir’s challenge will be proving that its AI offerings can sustain its meteoric rise without hitting a ceiling.
Can Palantir Become the No. 1 Software Stock?
If momentum is any indication, Palantir could overtake Salesforce in market cap sooner rather than later. But stock valuations and business fundamentals don’t always move in sync. Palantir may be worth $236.5 billion today, but until its revenue catches up with its valuation, skepticism will remain.
For now, investors appear bullish on the company’s potential. With AI adoption accelerating across industries, Palantir’s technology could be a major driver of future growth. However, the software sector is fiercely competitive, and its ability to maintain this momentum will depend on execution. If it continues to deliver on its AI-driven promises, Salesforce might soon find itself looking over its shoulder.
