Now, it’s been a bit of a sticky wicket in the software arena of late, what with values doing a sort of nose-dive. But Palantir Technologies (PLTR 1.65%), bless its entrepreneurial heart, has been rather stubbornly shining. While most of its SaaS brethren have been experiencing a distinctly uncomfortable wobble, Palantir’s shares have actually doubled in value over the past year. A dashedly clever performance, wouldn’t you agree? The company has been on a tear, reporting ten consecutive quarters of revenue growth that positively gallops along.
Palantir, you see, first made its name as a sort of indispensable chap for the government, a master of defense contracts. Its Gotham platform is rather brilliant at gathering and analyzing data from every nook and cranny, unearthing potential threats with the skill of a seasoned detective. Uncle Sam remains its biggest client, and business with him is booming. Last quarter, U.S. government revenue climbed a remarkable 66% to $570 million. Not bad for a bit of digital sleuthing, eh?
However, the real engine of growth, the positively spiffing bit, has been the U.S. commercial sector. Revenue there surged a whopping 137% last quarter to $507 million. The secret sauce? A platform called Foundry, an Artificial Intelligence marvel. It gathers data and arranges it into an ‘ontology’ – a fancy word for a rather neat system of connections – linking everything to real-world assets and processes. Customers can then apply the AI model of their choosing. AI models, you see, are frightfully particular about their data; they need it clean and well-organized, or they’ll start ‘hallucinating’ – which, in the context of business, is best avoided. Foundry, therefore, is a much-needed operating system for the whole shebang.
Now, while Palantir is undeniably hitting all the right notes, its stock is rather pricey, trading at a forward price-to-sales multiple of 51.5 times and a forward price-to-earnings ratio of 118 times. Makes one hesitate, doesn’t it? So, let’s turn our attention to a couple of SaaS stocks that have been a bit knocked about, and might offer a more sensible proposition.
ServiceNow
With a forward P/S ratio of 8 and a forward P/E of 30, ServiceNow (NOW +0.57%) is considerably less expensive than our friend Palantir. And yet, it’s also generating strong revenue growth, with subscription revenue climbing 21% last quarter. The stock, however, has been swept up in the general SaaS wobble, and is down over 20% over the past year. A bit of a bargain, perhaps?
ServiceNow has been caught up in the notion that AI might disrupt SaaS businesses, but it’s one of the most integral enterprise software platforms out there, deeply intertwined with its customers’ data. The company’s platform unites an organization’s workflow, combining information technology, human resources, and customer service, with years of security permissions, customized business rules, and audit trails built in. That makes it not only ‘sticky’ – a most desirable quality – but also a splendid environment for AI to flourish.
ServiceNow is seeing strong growth from AI, with its generative AI suite of solutions, Now Assist, hitting $600 million annual contract value (ACV) and on pace to grow to over $1 billion by year-end. It’s also looking to become an orchestration platform for agentic AI with its Control Tower platform. Given its sticky platform and strong AI growth opportunities, ServiceNow is a top SaaS stock to own. A rather sound investment, wouldn’t you say?
Salesforce
Like ServiceNow, Salesforce (CRM 3.44%) stock has also been experiencing a bit of a downturn. The stock is down more than 25% over the past year, bringing its valuation down to a forward P/S multiple of less than 4 times and a forward P/E of 15 times. A bit of a snip, wouldn’t you agree?
Salesforce’s platform is also tightly interwoven with its customer data, and its acquisition of Informatica and the launch of Data 360 helps position it as its customers’ master of records. As we discussed with Palantir, AI needs clean, structured data, so Salesforce is using its platform as the launch pad to become an agentic AI leader through its AgentForce platform. It’s already seeing strong growth in this area with AgentForce’s annual recurring revenue (ARR) soaring 169% to $800 million last quarter.
Overall, Salesforce is growing its revenue in the low double digits and is projecting more than 10% compound annual growth through fiscal 2030. That makes the stock a great GARP (growth at a reasonable price) name to own. A positively ripping good investment, what!
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2026-03-14 21:03