For the past two years, technology stocks have been boosted by a strong narrative surrounding artificial intelligence (AI). Software businesses, in particular, have benefited from this trend. Among these companies, Palantir Technologies and Salesforce are two of the largest players. While both appear well-positioned to continue growing, Palantir is expected to outpace Salesforce, especially among growth investors.
A key comparison between the two companies is their market capitalization. As of February 10, Salesforce has a larger market capitalization than Palantir by $52 billion. However, Palantir’s valuation has expanded significantly over the last two years, while Salesforce’s price movement has been more volatile.
So, what tailwinds do each company have? Salesforce owns several key properties, including data analytics platform Tableau and messaging tool Slack. However, its prior strategy of acquiring competing businesses has led to inconsistent results, with the company sometimes exceeding expectations but also underperforming at other times.
In contrast, Palantir is partnering with major tech companies like Microsoft, Meta Platforms, Amazon, and Oracle. This partnership represents a significant advantage for Palantir, as it continues to scale its biggest driver of growth: the Palantir Artificial Intelligence Platform (AIP) software suite.
Wall Street analysts are forecasting less acceleration in revenue and earnings per share (EPS) for Salesforce compared to Palantir over the next two years. This dichotomy suggests that analysts see more competitive headwinds for Salesforce, especially when compared to Palantir’s strong growth prospects.
While it is expected that Salesforce’s growth profile will mature at some point, AI has the potential to be a transformative opportunity for businesses of all sizes. Given this, Palantir’s prospects look particularly promising, and investors may continue to cheer on the stock, propelling its valuation even higher in 2025.
As a result, it is likely that Salesforce’s market capitalization will contract, while Palantir’s expansion could further narrow the gap between the two companies. If this happens, Palantir is expected to emerge as the more valuable business by the end of the year.
Source: https://www.fool.com/investing/2025/02/15/prediction-this-artificial-intelligence-ai-stock-c