Palantir Technologies, the data analytics firm co-founded by Peter Thiel and led by CEO Alex Karp, has entered the elite club of the top 10 most valuable U.S. technology companies by market capitalization. After an 8% stock rally on Thursday, May 8, Palantir’s valuation soared to $281 billion, which is approximately ₹23.4 lakh crore, overtaking enterprise software giant Salesforce, valued at $268 billion (₹22.3 lakh crore).
This milestone places Palantir just behind Oracle in the tenth spot, marking a significant rise for a company that has historically operated outside the Silicon Valley mainstream. Earlier this year, Palantir had already surpassed technology stalwarts IBM and Cisco, signaling a dramatic reordering of tech valuations in 2025.
Stock Performance: A Rare Bright Spot Amid Market Volatility
Palantir’s stock has been on a meteoric rise. Over the past year, it has quintupled in value and has already gained 58% in 2025, making it the top performer in the S&P 500 for the second consecutive year.
This performance stands in stark contrast to broader market trends. While the Nasdaq Composite has declined by 7% this year due to concerns over tariffs and a slowing economy, Palantir has managed to defy the downturn, buoyed by investor confidence in its AI-driven government contracts and defense analytics.
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Government Contracts Fuel Revenue Growth
Founded in 2003, Palantir originally built its reputation by providing big data solutions to U.S. intelligence agencies and defense contractors. That legacy continues to be a core strength.
In the most recent quarter, the company’s government segment grew 45% year-over-year to $373 million (₹31,000 crore), supported by major deals like a $178 million (₹14,800 crore) U.S. Army contract for AI-enabled battlefield systems.
In a shareholder letter, CEO Alex Karp defended Palantir’s deep involvement in defense technology, calling it an “unwavering commitment to national security” and essential to maintaining U.S. military superiority in the age of AI.
Peter Thiel’s Network and the “PayPal Mafia”
Palantir’s rise also brings renewed attention to its co-founder, Peter Thiel, a key member of the so-called “PayPal Mafia” — a group of tech entrepreneurs who emerged from PayPal’s early years. Thiel has a complex but influential relationship with Elon Musk, sharing investments in companies like SpaceX, Neuralink, and The Boring Company.
Thiel’s strategic vision and his alignment with U.S. defense priorities have helped position Palantir as a favored partner for national security contracts, even if the company’s commercial appeal lags behind traditional SaaS peers.
Valuation Raises Eyebrows: Is It Sustainable?
While Palantir’s valuation has impressed the market, analysts caution that the numbers come with a steep premium. Unlike Salesforce — which Palantir just overtook in valuation — Palantir generates only a fraction of the revenue.
Key valuation metrics:
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Trailing P/E Ratio: 520x
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Forward P/E Ratio: 200x
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Price-to-Revenue Ratio: 90x
These figures far exceed industry norms for large-cap tech firms and raise questions about whether Palantir’s stock price reflects fundamentals or future speculation about its AI and government work.
Still, bulls argue that Palantir’s data-first architecture, its unique position in public sector AI deployment, and geopolitical tailwinds give it long-term upside that justifies the valuation.
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Top 10 U.S. Tech Companies by Market Capitalization (May 2025)
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Microsoft – $3.3 trillion
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Apple
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Nvidia
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Amazon
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Alphabet (Google)
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Meta Platforms
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Broadcom
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Tesla
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Oracle
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Palantir
(Salesforce dropped to 11th place)
Palantir’s inclusion in the top 10 U.S. tech firms marks a turning point in how the market evaluates technology companies—no longer just by product sales or app installs, but also by data leverage, AI capability, and national security relevance.
Though concerns over its steep valuation remain, Palantir’s rise confirms its status as a next-generation tech power player, one built on the backbone of government contracts, AI-driven analytics, and Silicon Valley’s most influential networks.