Palantir vs. Salesforce: Which Is the Better AI Software Stock to Own in 2025?

The early winners from artificial intelligence (AI) are largely companies involved in AI infrastructure, but software companies have also begun to benefit. Two of the top AI software companies heading into 2025 are Palantir Technologies (NASDAQ: PLTR) and Salesforce (NYSE: CRM).

Palantir has already begun to see the benefits from AI, with its AI platform helping its revenue accelerate. This led to an incredible performance in its stock price in 2024. Salesforce, meanwhile, has just recently introduced its important AI solution.

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Let's see which stock looks poised to outperform in 2025.

AI-powered growth

When it comes to AI software, Palantir is the early leader. The company took its early success with the government, where its analytics platform is used for mission-critical tasks such as fighting terrorism, and integrated AI models into its platform. This helped essentially transform the company's platform into an AI operating system that is able to help customers make data-driven decisions across a multitude of use cases in various industries.

Eschewing creating its own AI models, Palantir's focus has been on the application and workflow layers, where its platform can help with logic and functionality to provide the actions needed to complete tasks. It then rigorously tests these custom solutions through tools within its platform to make sure they can be applied to real-world applications.

Palantir's AI platform led to strong growth within the commercial sector. Last quarter, its U.S. commercial revenue climbed 54% to $179 million, while its U.S. commercial customer count jumped 77% year over year. Overall revenue rose 30% to $726 million.

However, this could really just be the start of Palantir's success, as much of its early AI success has been through proof-of-concept (prototype) work. Taking customers from proof of concept to real-life applications (production), could be a huge growth driver moving forward.

While Palantir got its start as an analytics platform for the government, Salesforce established itself as the leader in customer relationship management (CRM), where its platform acts as a centralized hub to store customer information all in one place. Through its acquisitions of Mulesoft, Tableau, and Slack, it has moved into the areas of automation, analytics, and employee communication.

Salesforce, meanwhile, is looking to become the leader in agentic AI. This is often viewed as the next stage of AI, where AI agents can act autonomously without human intervention to help make decisions and take actions to achieve a specific goal.

On this end, the company recently introduced Agentforce, its autonomous AI agents. These agents can be built and used for various cases. The company uses an example in the financial industry, where Agentforce can research discussion points before a meeting, such as a company's exposure to international markets, or even check power-of-attorney status to ensure proper compliance and then direct any communications to properly licensed supervisors. In the healthcare industry, for example, it can review benefit coverage and approve care requests.

Agentforce was launched just in October, but the company said on its early December earnings call that it already closed 200 Agentforce deals and had thousands of potential deals in its pipeline. Agentforce is a consumption product that costs $2 per conversation, and the company sees the potential for having 1 million Agentforce AI agents deployed by the end of fiscal 2026 (ending January 2026). As such, this is a huge opportunity for the company over the next few years.

Image source: Getty Images.

Valuations and verdict

Palantir is currently the much faster growing of the two companies, with revenue growth of 30% last quarter compared to 8% for Salesforce. Salesforce forecast similar 7% to 9% revenue growth for Q4, while Palantir guided for 27% revenue growth. If their AI solutions take off, both companies have good potential upside to these forecasts.

From a valuation standpoint, Salesforce is the much cheaper stock. It trades at a forward price-to-sales (P/S) multiple of under 8 times next year's estimates, while Palantir trades at nearly a 51 times multiple. That is an extraordinary valuation for a company currently growing its revenue by 30%, and is more than double peak historic software-as-a-service (SaaS) multiples.

CRM PS Ratio (Forward 1y) data by YCharts

While Palantir has a potential huge opportunity in front of it, a lot of future growth is priced into the stock and there is not much room for error. As such, for 2025 I prefer the safer and much cheaper Salesforce, which looks like it has its own big opportunity in front of it with Agentforce.

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Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies and Salesforce. The Motley Fool has a disclosure policy.