Palantir Stock Or Snowflake's?

Published: Friday, June 6, 2025 at 9:00 am

Palantir vs. Snowflake: A Data Stock Showdown

The artificial intelligence boom has sparked intense interest in tech stocks, particularly those involved in data analysis. Two prominent players in this arena, Palantir and Snowflake, are vying for investor attention. Both companies offer rapid growth potential, but their approaches and financial performances differ significantly.

Palantir, specializing in big data analytics for government and commercial clients, has seen its stock surge over 500% in the last year. Snowflake, a cloud data warehousing service provider, has experienced a more modest 52% increase during the same period.

While Snowflake initially demonstrated faster revenue expansion, Palantir's growth has recently accelerated, with a 39.3% sales surge in the latest quarter, surpassing Snowflake's 27.4%. This shift is attributed to Palantir's key government contract wins and commercial sector progress, while Snowflake faces increased competition and a maturing cloud market.

Profitability paints a stark contrast. Palantir reported a net income of $571 million over the last four quarters, with a robust net income margin of 18.3%. Its operating cash flow reached $1.3 billion, yielding a 42.8% margin. Snowflake, however, reported a net loss of $1.3 billion, resulting in a negative net income margin of -35.5%. Its operating cash flow was $960 million, with a 26.5% margin.

Both companies boast strong balance sheets, but Palantir holds a slight advantage. Palantir's debt-to-equity ratio is a low 0.1%, with a cash-to-assets ratio of 80.6%. Snowflake's debt-to-equity ratio is 3.9%, and its cash-to-assets ratio is 51.3%.

Market downturn resilience is a concern for both. Palantir's stock plummeted during the 2022 inflation crisis but has since recovered, while Snowflake's recovery has been less complete.

Valuation is a key differentiator. Palantir trades at high multiples, with a price-to-sales ratio of 93.4 and a price-to-free cash flow ratio of 218. Snowflake's ratios are lower but still elevated, at 18.9 and 71.3, respectively.

BNN's Perspective: While Palantir's recent growth and improving profitability are noteworthy, Snowflake's potential for increased AI tool adoption and its cloud platform's role in data management make it an intriguing investment. The risk-reward profile appears more favorable for Snowflake, despite its lower profitability and slowing growth.

Keywords: Palantir, Snowflake, AI, data stocks, stock market, investment, growth, profitability, financial stability, cloud data warehousing, big data analytics, market downturn, valuation

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