Palantir's $420 Billion Valuation Outpaces Salesforce's $230 Billion Despite 10x Lower Revenue

A recent social media post from SaaStr.ai has highlighted a significant valuation disparity in the tech sector, noting that data analytics firm Palantir Technologies has surpassed Salesforce in market capitalization, reaching approximately $420 billion, while Salesforce stands at around $230 billion. This comes despite Palantir's trailing twelve-month revenue of $3.44 billion, which is roughly one-tenth of Salesforce's reported annual revenue of $37.895 billion for fiscal year 2025. The tweet questioned this valuation, stating, "New!! Palantir is Now Worth More ($420B) Than Salesforce ($230B) — With 1/10th The Revenue. Does This Make Sense? It Might."

Palantir's soaring valuation is largely attributed to investor enthusiasm for its artificial intelligence (AI) capabilities and its strong ties to government contracts. The company, known for its Gotham and Foundry platforms, has seen its stock surge over 1,700% since its 2020 public debut. Its U.S. government revenue grew 53% to $426 million in the last quarter, with a significant $10 billion contract with the U.S. Army further solidifying its position. CEO Alex Karp described a recent quarter as "once-in-a-generation, truly anomalous," emphasizing the company's commitment to providing an "unfair advantage" to American corporations and government.

In contrast, Salesforce, a pioneer in cloud computing and customer relationship management (CRM), generated $37.895 billion in revenue for its fiscal year 2025. The company continues to dominate the CRM market, holding a 20.7% market share, exceeding the combined share of its closest competitors. Salesforce's revenue streams are diverse, encompassing sales, service, marketing, and commerce clouds, with recent advancements in its AI offerings like Einstein Copilot and Agentforce.

Analysts, while acknowledging Palantir's impressive growth, have voiced concerns regarding its high valuation multiples. The company trades at a forward price-to-earnings ratio significantly higher than many tech giants, indicating substantial future growth expectations. Jefferies analyst Brent Thill, for instance, maintained an "underperform" rating, citing a "disconnected between valuation and achievable growth."

The market's premium on Palantir reflects a strong belief in its disruptive AI technology and its strategic importance in defense and intelligence, which often command higher multiples due to perceived competitive moats and long-term growth potential. This contrasts with Salesforce's more mature, albeit robust, enterprise software business model. The ongoing divergence highlights the market's current prioritization of AI-driven innovation and strategic government partnerships over traditional revenue scale.