Palantir Stock Plunges 10% Amid Pentagon Budget Cut Concerns
Key Points
* Palantir Technologies (PLTR) shares plummeted 10.08% on Wednesday.
* The decline followed a report that the Pentagon is planning substantial budget cuts over the next five years.
* Palantir's revenue relies heavily on government contracts, particularly with the Department of Defense.
Budget Cuts Impact on Palantir
The Washington Post reported that Defense Secretary Pete Hegseth has directed the Pentagon to reduce its budget by 8% annually for the next five years. This could result in tens of billions of dollars in cuts.
Palantir's software is widely used by the US government for surveillance purposes. Over 50% of its revenue comes from global government contracts, with a significant portion from the Department of Defense.
The budget cuts could potentially reduce Palantir's revenue stream and impact its business growth.
Palantir's Stock Performance
Despite the recent decline, Palantir stock has performed well in 2025. It has gained over 48% year-to-date, making it the second-best performer in the S&P 500. However, the stock has lost about 35% over the past year.