Overview

• 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.