Tech Stocks Palantir and Snowflake Thrive Amid Market Turmoil

Tech stocks are facing pressure this year, but Palantir and Snowflake have posted impressive gains. With significant revenue growth and a focus on AI platforms, both companies show strong potential for investors amidst a challenging market.

Date: 31-05-2025

AI Rating: 7

**Earnings Performance and Revenue Growth** - According to the report, Palantir Technologies has demonstrated robust performance with a revenue increase from 18% year-over-year in Q1 2023 to 39% in Q1 2025. This upward trend highlights the company’s successful integration of AI capabilities into its operations and signifies that demand for its services is escalating. Furthermore, the increase in Remaining Deal Value (RDV) suggests the company is securing more contracts relative to what it is fulfilling. This bodes well for future revenue growth as existing and new customers continue to adopt its services.

In terms of earnings growth, Palantir reported a staggering 62% increase due to improved operating margins, attributed to favorable unit economics and customer adoption of extensive services, indicating strong fundamentals. Snowflake, on the other hand, witnessed a product revenue increase of 26% year-over-year, which, while impressive, is slower than Palantir's. However, its rapid growth in Remaining Performance Obligations (RPO) at 34% to $6.7 billion reflects robust customer engagement and potential for future upside.

**Profit Margins and Operational Efficiency** - Palantir's adjusted operating margin saw an increase of 8 percentage points, showing effective cost management and operational efficiency, which is critical for value generation in a tech-centric industry. The favorable unit economics portrayed in the report suggests that Palantir can sustain profit margins while expanding its revenue base.

**Conclusion** - Both firms are benefiting from AI’s secular growth trend, yet Palantir appears to be experiencing faster revenue growth opportunities compared to Snowflake. Investors should be cautious about stock valuations, as both companies are classified as expensive according to market standards relative to their earnings, but their growth trajectories justify the current valuations. The choice comes down to risk tolerance; Palantir may appeal to those willing to embrace volatility, whereas Snowflake may cater to more conservative investors seeking growth without steep pricing.

Stocks: PLTR SNOW