Palantir Technologies (PLTR) recently rocketed into the top 10 U.S. tech companies by market cap, thanks to its artificial intelligence (AI)‑driven analytics platforms and lucrative government contracts. On May 8, Palantir vaulted past Salesforce (CRM) to join the top 10, with a current market cap of $300.4 billion - even as Salesforce’s annual revenue remains more than 10 times greater. Investors are now paying an astronomical 278 times trailing earnings for Palantir, underscoring the market’s enthusiasm for its data‑mining tools.

With Palantir commanding headline attention, it’s worth asking whether the established CRM leader might offer a more balanced risk‑reward profile today. Salesforce’s proven revenue streams, diversified client base, and more moderate valuation multiple stand in sharp contrast to Palantir’s meteoric rise. 

For investors weighing growth against price, comparing these two giants could reveal which software stock deserves a spot in your portfolio.

The Bull Case for Salesforce

Based in San Francisco, Salesforce (CRM) is a leading CRM technology company offering integrated platforms, Agentforce, Data Cloud, Industries AI, Salesforce Starter, Slack, and Tableau, as well as solutions for marketing, commerce, field service, and analytics. These tools empower businesses worldwide to connect with customers more efficiently. Salesforce is one of the leading companies adopting agentic AI technologies. Rather than simply deploying AI copilots for intelligent recommendations, these solutions enable AI agents to perform tasks traditionally handled by human workers.

Valued at $278 billion by market capitalization, shares of Salesforce have regained momentum after a slump in the first three months of 2025. The stock has rebounded by 13.8% over the past month, though CRM remains down by 13.4% year to date.

In terms of valuation, Salesforce trades at a reasonable level. Its forward adjusted price/earnings (P/E) ratio of 25.8x reflects a 37% discount to its historical average valuation, and is just 17% above the sector median, which is reasonable for a growth stock of CRM's size and reach.

Financially, the company demonstrated strong fundamentals in its most recent quarterly earnings. Revenue reached $9.99 billion in the fiscal fourth quarter of 2025, marking 8% year-over-year growth, while EPS of $2.78 exceeded the estimate of $2.62. Salesforce closed Q4 holding $14 billion in cash and $4.9 billion in strategic investments, against $8.4 billion in debt, reflecting a strong net cash position.

Looking ahead, management expects 7% revenue growth in the current quarter, although EPS is projected to dip to $1.87 due to currency headwinds and increased AI investments.

Overall, Wall Street analysts have a consensus “Strong Buy” rating on CRM stock. The average price target of $360.93 implies expected 24.1% upside, while the Street-high target of $440 suggests over 51% potential upside from current levels.

The Bull Case for Palantir Stock

Based in Denver, Palantir Technologies (PLTR) is a leading provider of data analytics and AI solutions. The company offers advanced platforms such as Palantir Foundry and Gotham, enabling governments and commercial clients to integrate, analyze, and act on complex data, driving smarter decisions, operational efficiency, and AI-powered insights across critical sectors.

Valued at over $300 billion by market cap, shares of PLTR have been on a remarkable bull run over the past 52 weeks, soaring more than 505%. This breakout momentum has continued into 2025, with the stock up 71.7% year-to-date - making it one of the top-performing technology stocks this year, even as the broader tech sector struggles.

However, this meteoric rise has pushed Palantir’s valuation to lofty levels. The stock currently trades at a forward P/E ratio above 200x, far exceeding the industry average of 22x. In fact, that's a 74% premium to Palantir's own notoriously rich historical valuations.

In Q1 2025, Palantir delivered strong results. Revenue surged 39% year-over-year to a better-than-expected $884 million, while EPS of $0.13 met analysts' expectations. The company closed the quarter with 139 contracts valued at $1 million or more, including 51 deals exceeding $5 million and 31 worth over $10 million, highlighting its strength in securing large-scale, high-impact engagements across both commercial and government sectors.

Its financial position remains solid, ending the quarter with $304 million in free cash flow and $993 million in cash and cash equivalents.

Looking ahead, Palantir raised its full-year revenue guidance from a range of $3.74–$3.76 billion to $3.89–$3.90 billion. Analysts expect Q2 earnings to double sequentially, projecting full-year 2025 EPS of $0.37.

Despite its robust fundamentals and growth catalysts, analyst sentiment remains generally cautious, with many citing valuation concerns. The consensus rating is “Hold,” with an average price target of $91.11 - about 30% below current prices. On the upside, Bank of America's newly set Street-high target of $150 suggests the stock could still gain 15% from current levels.

The Bottom Line

While Palantir’s AI-fueled growth and massive contract wins have justified investor enthusiasm, its extreme valuation - at over 200x forward earnings - introduces considerable risk. In contrast, Salesforce, with a diversified CRM ecosystem, 7% projected revenue growth, a more modest 25x forward P/E, and solid cash flow, presents a more balanced risk–reward opportunity.