Every quarter we look at the SaaS multiples of publicly traded companies. One analysis we’ve started doing is to look at the 10 companies with the highest multiples, and trying to understand why their multiples are so high. Below are the top 10.
Looking at this list, it’d be easy to say “these companies are AI forward, so they’re getting the best multiples,” but in our view that’s too lazy. We see more to the high valuations here than just AI. Below we lay out the larger factors.
Infrastructure plays with excellent growth. These companies all function as embedded infrastructure rather than just discretionary tools, and have unusually strong growth at scale. Several are sustaining mid-20% to high-50% year-over-year growth, which is exceptional at their respective revenue bases. Palantir grew ~56% year-over-year to $4.5B in revenue for full-year 2025, with Q4 alone clocking 70% growth. Shopify grew ~30% on an $11.6B revenue base. Cloudflare grew ~30% to $2.2B, with Q4 accelerating to 34%. Snowflake sustained ~29% growth to $4.7B. Datadog grew ~28% to $3.4B. Samsara grew ~29% on a TTM basis, with FY2025 coming in at 33% growth. These platforms are deeply integrated into customer workflows; for instance Cloudflare sits directly in global web traffic, Snowflake anchors enterprise data stacks, and CrowdStrike embeds in endpoint security. Switching costs are high and pricing power is durable.
Cash generation and operating leverage. Several names in this cohort convert revenue to cash at remarkable rates. Palantir generated $2.3B in adjusted free cash flow for full-year 2025, representing a 51% margin, alongside GAAP net income of $1.6B at a 36% margin. Datadog and Cloudflare continue to generate strong free cash flow while still investing aggressively in product. DigitalOcean has quietly become highly profitable: 2025 net income reached $259M.
Multiples have always been high. Many of these names have commanded premium multiples for years, well before generative AI became a mainstream narrative. Cloudflare, CrowdStrike, Snowflake, Shopify, and Datadog all traded at elevated multiples during 2020–2021 — and in some cases their current multiples are lower than their pandemic-era peaks, even as the underlying businesses are substantially larger and more profitable. Palantir is the notable exception: it currently trades at roughly 80x trailing sales and over 165x forward earnings, among the highest multiples of any large-cap software company. JFrog and Samsara are more modestly valued within the group but still trade at meaningful premiums to the broader software universe.
AI is as a valuation amplifier. The market is rewarding platforms where AI directly increases usage, expansion, or structural relevance. Palantir’s AIP platform and boot camp model is converting enterprise customers rapidly and its government AI contracts include a reported $10B Army deal. Cloudflare ended 2025 with 269 customers spending over $1M annually, a 55% increase year-over-year, with its Workers developer platform and AI inference infrastructure driving outsized growth. Snowflake’s Cortex AI functions enable AI workloads directly on customer data. Datadog’s LLM observability tools and AI SRE agents are expanding its platform relevance as enterprises ship AI applications. JFrog is benefiting from growing regulatory focus on software supply chain security and rising threats from AI-driven development patterns like code assistants and MCP servers, catalyzing enterprise consolidation around unified DevSecOps platforms. JFrog’s cloud revenues grew 45% in 2025, and its million-dollar ARR customer count grew 42%, suggesting the AI tailwind is real and accelerating even if headline growth (~24%) looks more modest than peers.
Size of the company isn’t a factor. DigitalOcean is the stand out for being small and highly valued. At roughly $900M in annual revenue and mid-teens growth, it looks out of place alongside Palantir and CrowdStrike. The explanation is positioning. DigitalOcean has repositioned itself as an agentic inference cloud platform, serving AI-native and digital-native enterprises that are building and running intelligent applications. Over 14,000 AI agents have already been created on its Gradient platform, with nearly 6,000 customers using it since January 2025, 30% of whom were new to DigitalOcean’s ecosystem entirely.
Dominance is a factor. Microsoft commands a premium multiple partly because of it’s dominance . Microsoft grew revenue ~17% year-over-year to $305B. At that scale, nearly every major enterprise software category runs through Microsoft in some form. The premium it commands reflects the market’s belief that Azure’s infrastructure buildout and the deep integration of Copilot across its product suite will sustain above-market growth rates.
Today’s highest software multiples are reserved for businesses that pair growth at scale, strong unit economics, and infrastructure-like stickiness with AI either strengthening the case. You can’t just be an interesting AI play.
Thank you for your readership. Visit us at blossomstreetventures.com for more data and blogs, and email the author at sammy@blossomstreetventures.com or connect on LinkedIn.