Salesforce Inc. (NYSE:CRM) CEO Marc Benioff on Wednesday said the company secured a U.S. Army contract by outcompeting Palantir Technologies Inc. (NYSE:PLTR) with lower prices and proven AI-driven solutions.
Benioff Highlights Army Win Over Palantir
Speaking with Jim Cramer on CNBC's Mad Money following Salesforce's fiscal second-quarter earnings, Benioff revealed that the company won a U.S. Army contract against Palantir. He credited Salesforce's competitive pricing for tipping the scales in its favor.
"We had a tremendous success against Palantir because, by the way, our prices are just so much lower," Benioff said. "We're offering a very competitive product at a much lower cost."
Benioff added that Salesforce's government business is already a multi-billion-dollar segment, with the U.S. government ranking as its largest customer.
He noted that while Salesforce works extensively with agencies such as the Department of Veterans Affairs and the General Services Administration, the Army contract marked a significant expansion.
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Strong Quarter But Conservative Guidance
Salesforce reported second-quarter revenue of $10.24 billion, beating Wall Street's consensus of $10.14 billion. Adjusted earnings of $2.91 per share also topped estimates of $2.78. Revenue grew 10% year-over-year, while adjusted operating margin reached 34.3%.
The company raised its fiscal 2026 revenue outlook to between $41.1 billion and $41.3 billion, slightly above analyst expectations. It also boosted full-year adjusted earnings guidance to a range of $11.33 to $11.37 per share.
Still, shares fell in after-hours trading as investors focused on Salesforce's conservative third-quarter guidance. During Thursday's regular trading hours, Salesforce shares continued to drop and settled at $244.01, according to data from Benzinga Pro.
Benioff Previously Eyed Palantir's Premium Pricing Model
Last month, Benioff praised Palantir's pricing model and its forward-deployed engineer strategy, admitting it has made him reconsider Salesforce's own pricing.
While highlighting that Salesforce delivers large-scale government automation at far lower costs than Palantir, he expressed admiration for Palantir's valuation and lofty revenue multiples compared to Salesforce.
Palantir's premium pricing has been successful in niche government and enterprise markets, though former CFO Colin Anderson earlier cautioned that small contracts under $100,000 can be financially unsustainable.
How Is The Market Outlook
Palantir's stock has skyrocketed more than 417% in the past year, giving it a hefty forward price-to-earnings ratio of about 178.6 and a market valuation of $370.26 billion. By contrast, Salesforce trades at a much lower forward P/E of 21.55 with a market cap of $233.27 billion.
According to Benzinga's Edge Stock Rankings, CRM remains on a downward trend across short, medium and long-term horizons. Additional performance details can be found here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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