Palantir Stock Drops Amid Renewed Concerns Over Defense Cuts and Market Volatility

The AI-driven tech company faces valuation scrutiny, insider sales, and external market pressures despite strong commercial growth projections.

Palantir shares have fallen 27% from their February peak, pressured by U.S. defense budget cuts and broader market volatility.
The U.S. Department of Defense, a key revenue source accounting for 17% of Palantir's 2024 revenue, is implementing significant budget reductions over the next five years.
Goldman Sachs reaffirmed a 'neutral' rating and $180 price target, citing concerns over Palantir's 477x forward earnings valuation and limited visibility into future AI workflow advancements.
Broader market concerns, including CoreWeave's IPO struggles and a 35% valuation cut, have intensified scrutiny on AI sector growth and impacted Palantir's stock performance.
Despite challenges, Palantir's commercial revenue is projected to grow 54% in 2025, driven by its AI platform and ontology framework, which analysts highlight as a key differentiator.