There's a new member in the list of the top 10 U.S. technology companies by market cap.
Data analytics software vendor Palantir jumped about 8% on Thursday, bringing its valuation to $281 billion. That puts it ahead of Salesforce, which closed at a $268 billion and had previously been ranked tenth. Palantir surpassed legacy tech giants Cisco and IBM earlier this year.
Microsoft tops the market cap list at $3.3 trillion, followed by Apple and Nvidia.
Palantir's induction follows a dramatic rally in the stock price, which has more than quintupled in value over the last year. The shares have jumped 58% in 2025, positioning Palantir to be the top S&P 500 performer for a second year. The stock has been a major outlier in recent months, continuing to pop while its tech peers have been weighed down by tariff uncertainty and fears of an economic slowdown.
The Nasdaq is down 7% this year even after bouncing back some over the past three weeks.
In an aminated shareholder letter attached to the company's earnings report, Karp applauded his company's controversial defense business and suggested that some former critics in Silicon Valley have "turned a corner and begun following our lead."
"We note only that our commitment to building software for the U.S. military, those whom we have asked to step into harm's way, remains steadfast, when such a commitment is fashionable and convenient and when it is not," Karp wrote.
But investors who want in on the action have to pay up, because while Palantir has joined the top tech ranks by market cap, it's a far smaller company in terms of sales and profit. Salesforce, the cloud software company that it just leapfrogged, generated over 10 times more revenue than Palantir in the past year, and is expected to do so again over the next four quarters.
That all means Palantir has multiples that are much higher than its large-cap tech peers. Palantir currently trades for 520 times trailing earnings, almost 200 times forward earnings, and 90 times revenue.
"Fundamentals are clearly alive, but we think irrational valuation," wrote Brent Thill, an analyst at Jefferies, in a note on May 6. He has the equivalent of a sell rating on the stock.
Among the 10 other top tech names, including Salesforce, the average trailing price-to-earnings multiple is about 58, and it's only that high because Broadcom and Tesla are both around 160. For forward earnings, the average multiple is roughly 37.5, inflated by Tesla's 137 figure. And for revenue, the average multiple is 10.2, with Nvidia carrying the highest premium at 22.
Palantir shares slumped more than 12% on Tuesday following first-quarter results. The company topped revenue estimates but showed a deceleration in international commercial sales that spooked some investors. Accelerating growth expectations have also left the company with a high bar to clear.
"You don't have to buy our shares," Karp told CNBC's Brian Sullivan on Wednesday. "We're happy. We're going to partner with the world's best people and we're going to dominate. You can be along for the ride or you don't have to be."
