Salesforce has recently launched a new business unit, Missionforce, which will focus on national security.
The company’s CEO believes Palantir’s software is overpriced.
Palantir’s growth rate has been accelerating over the past year, but a slowdown could be inevitable.
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Palantir Technologies (NASDAQ: PLTR) has been an unstoppable stock to own in recent years. It is a trusted partner for the U.S. government and it has also been growing its commercial business at a fast pace, thanks in large part to the success of its Artificial Intelligence Platform (AIP). In the past 12 months, Palantir’s stock has risen an astounding 380%.
But there may be trouble ahead. There’s plenty of competition in the space and it may have a big rival to worry about, one that’s focusing on national security and that may undercut it on price.
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Sales and marketing giant Salesforce (NYSE: CRM) is a big name in data analytics. Its software helps connect businesses to customers, enabling them to improve their operations and grow their sales. It has also been leveraging AI and now offers AI agents that it says can provide businesses with access to a digital labor force to add even more efficiency.
Salesforce isn’t stopping there, however. It took notice of Palantir’s success in focusing on national security efforts and it has recently launched a new business unit, which is called Missionforce. The company says that its goal is “to help our warfighters and the organizations that support them operate smarter, faster, and more efficiently.”
And this may not be just a small and subtle move. Salesforce may see an opportunity to undercut Palantir with Missionforce. CEO Marc Benioff said that Palantir’s software was “the most expensive enterprise software I’ve ever seen,” suggesting that Salesforce may be able to justify raising its own prices and still be competitive.
Palantir has been a captivating stock to own given its accelerating growth in recent years, which is why many retail investors see it as being unstoppable.
PLTR Revenue (Quarterly YoY Growth) data by YCharts
The concern I have, however, is what might happen when that growth inevitably slows down? The excitement is still extremely high around the business today and its market cap remains massive at $424 billion, while Salesforce is worth around $230 billion.
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