The AI Application Giant Prints Cash at 51% Margins While the Data Warehouse Burns Through Hundreds of Millions

Core Insights - Palantir and Snowflake are approaching AI from different angles, with Palantir focusing on application deployment and Snowflake on data infrastructure [1][5][6] Financial Performance - Palantir reported a 63% revenue growth with a 51% operating margin, generating $393 million in operating income and $540 million in free cash flow, marking its first time crossing $1 billion in trailing 12-month free cash flow [2][4] - Snowflake achieved $1.21 billion in revenue, a 29% increase, but reported a negative 27% operating margin, losing $329 million operationally [3][4] Market Positioning - Palantir's U.S. commercial revenue surged 121% to $397 million, benefiting from government contracts and high customer conversion rates [2][7] - Snowflake's net revenue retention was 125%, but it faces challenges in convincing customers to consolidate workloads on its platform amid competition [3][6] Valuation Metrics - Palantir trades at 112x sales, reflecting market expectations for continued AI dominance, while Snowflake trades at 17x sales, viewed as a turnaround play [8] - Institutional ownership is higher in Snowflake at 74% compared to Palantir's 60% [8] Strategic Focus - Palantir emphasizes the importance of application and workflow in AI, showcasing significant efficiency gains for clients [5] - Snowflake's strategy revolves around data warehousing, with a need to establish a clear path to profitability [6][11]