Palantir Stock Plunges on Pentagon Budget Cut Concerns

PLTR

* Palantir shares experienced a second consecutive 10% drop on Thursday, following a Washington Post report revealing the Trump administration's plans for significant Pentagon budget cuts over the next five years.
* The cuts, potentially totaling tens of billions of dollars, could impact Palantir's revenue stream, as a substantial portion stems from government contracts with the US Department of Defense.

Market Reaction

* NASDAQ GS: $98.77 (-11.86%) as of 11:01:43 AM EST (Market Open)
* Despite the selloffs, Wedbush analyst Dan Ives remains optimistic, asserting that Palantir's AI software capabilities will allow it to secure additional Pentagon funding.
* Ives highlights Palantir's strong positioning in the new spending environment, believing it will drive growth as programs undergo scrutiny.

Palantir's Government Contracts

* Palantir provides AI software for surveillance purposes to the US government.
* Over half of the company's revenue in the latest quarterly report came from government contracts, primarily from the US Department of Defense.

Outlook

* Palantir is reportedly in talks to form a consortium with competitors like Anduril to bid for government contracts.
* The stock has performed exceptionally well in 2025, rising over 48% year-over-year, making it the second-best performer in the S&P 500.
* Over the past year, Palantir shares have surged by more than 300%.