Palantir Stock Tumbles 30% Following Pentagon Budget Cut Concerns

The defense contractor faces uncertainty as plans for U.S. military spending reductions and insider stock sales weigh on investor confidence.

Palantir shares have fallen 30% from their peak last week after reports of an 8% annual reduction in U.S. defense budgets over the next five years.
The U.S. Department of Defense is a major revenue source for Palantir, contributing over 40% of its revenue in 2024, raising concerns about future growth.
CEO Alex Karp's recent stock sale plan, allowing him to sell nearly 10 million shares, has added to investor unease about the stock's valuation.
Despite the downturn, some analysts argue Palantir could benefit from government efficiency initiatives, positioning its software as a cost-saving tool.
The company's stock remains up 19% in 2025 and 300% over the past year, but analysts question whether its high valuation is sustainable.