Microsoft vs Palantir: Two AI Plays, One Winner

"Microsoft's Q3 FY26 report showed Intelligent Cloud revenue of $34.681 billion, up 30%, with Azure growing 40%. The headline number that mattered: an AI business at a $37 billion annual run rate, up 123%. Commercial remaining performance obligations sit at $627 billion, nearly double a year ago. That is a real demand backlog with contractual visibility."

"Palantir's Q4 FY25 was a smaller, hotter print. Revenue grew 70% to $1.41 billion, U.S. commercial revenue surged 137%, and the company posted a Rule of 40 score of 127%. CEO Alex Karp's commentary stayed characteristically loud, calling Palantir "an n of 1" while pointing to $4.26 billion in record TCV closed."

"Microsoft spent $30.876 billion on capex in a single quarter, up 84.39%, mostly on GPUs, data centers, and power. Palantir is capital-light SaaS, generating $791 million in free cash flow against a much smaller revenue base. One company is buying the physics of AI. The other is selling the workflow on top."

"Microsoft's customer base is sprawling and global. Palantir's revenue is U.S.-heavy, with U.S. government at $570 million giving it defense and intelligence exposure that Microsoft does not match in concentration."

Microsoft reported Intelligent Cloud revenue of $34.681 billion, up 30%, with Azure growing 40% and an AI business reaching a $37 billion annual run rate, up 123%. Commercial remaining performance obligations totaled $627 billion, nearly double a year earlier. Palantir reported Q4 FY25 revenue growth of 70% to $1.41 billion, with U.S. commercial revenue up 137% and a Rule of 40 score of 127%. Palantir closed $4.26 billion in record TCV. Microsoft spent $30.876 billion on capex in a quarter, mostly on GPUs, data centers, and power, while Palantir generated $791 million in free cash flow. Palantir’s revenue is U.S.-heavy, including $570 million from U.S. government.

Read at 24/7 Wall St.