- Palantir Technologies Inc. (PLTR) joined the top 10 U.S. tech companies with a $281 billion market cap after an 8% stock surge, surpassing Salesforce.com Inc. (CRM) at $268 billion, while Microsoft Corporation (MSFT) leads at $3.3 trillion.
- The company’s 58% stock gain in 2025, driven by a 45% government business growth to $373 million, including a $178 million U.S. Army AI contract, has made it the top S&P 500 Index (SPY) performer, despite a 7% Nasdaq Composite Index (IXIC) decline.
- Palantir’s valuation, at 520x trailing earnings and 90x revenue, far exceeds peers’ averages of 58 and 10.2, respectively, prompting analyst concerns after a 12% stock drop due to slowing international commercial sales.
Palantir Technologies Inc. (PLTR) has surged into the top 10 U.S. technology companies by market capitalization, reaching $281 billion with a stock price of $118.97 per share after a nearly 8% jump on Thursday, according to CNBC. The rally pushed Palantir ahead of Salesforce.com Inc. (CRM), which closed at $268 billion.. The data analytics software vendor, founded in 2003 by Peter Thiel and CEO Alex Karp, has seen its stock price more than quintuple over the past year, with a 58% gain in 2025, making it the top performer in the S&P 500 Index (SPY) for the second consecutive year. This meteoric rise contrasts with a broader tech sector downturn, as the Nasdaq Composite Index (IXIC) is down 7% this year despite a recent three-week recovery.
The company’s valuation now exceeds that of legacy tech giants Cisco Systems Inc. (CSCO) and International Business Machines Corporation (IBM), which Palantir surpassed earlier in 2025. Meanwhile, Microsoft Corporation (MSFT) leads the market cap rankings at $3.3 trillion, followed by Apple Inc. (AAPL) and Nvidia Corporation (NVDA). Palantir’s growth is driven by its booming government business, which grew 45% to $373 million last quarter, bolstered by a $178 million contract to develop AI-enabled systems for the U.S. Army. In a shareholder letter accompanying the latest earnings report, Karp defended the company’s controversial defense work, emphasizing its unwavering commitment to supporting the U.S. military.
However, Palantir’s lofty valuation raises concerns among analysts, as its financial metrics lag behind peers. Salesforce, which Palantir recently eclipsed, generated over 10 times more revenue in the past year and is projected to maintain that gap over the next four quarters. Palantir trades at 520 times trailing earnings, 200 times forward earnings, and 90 times revenue, far exceeding the averages among the top 10 tech firms, which stand at 58 for trailing P/E, 37.5 for forward P/E, and 10.2 for price-to-sales, with outliers like Broadcom Inc. (AVGO) at 160 and Tesla Inc. (TSLA) at 137 inflating the figures. Jefferies analyst Brent Thill, in a May 6 note, described Palantir’s valuation as “irrational” and maintained a sell-equivalent rating.
Despite topping revenue estimates in its first-quarter results, Palantir’s stock slumped over 12% on Tuesday after reporting a slowdown in international commercial sales, which rattled investors accustomed to the company’s rapid growth. Karp, addressing concerns on CNBC, remained defiant, stating, “You don’t have to buy our shares,” while expressing confidence in Palantir’s trajectory to “dominate” through partnerships with top-tier players. The company’s ability to sustain its momentum amid high expectations and a premium valuation will be critical, particularly as tariff uncertainties and fears of an economic slowdown continue to weigh on tech peers. For now, Palantir’s ascent underscores its unique position in the AI and defense sectors, even as its valuation invites scrutiny.
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