Palantir Stock Plummets 10% on Defense Budget Cut Proposal
* Palantir Technologies (PLTR) plunged by 10.08% on Wednesday due to a Washington Post report revealing plans for significant budget cuts within the Pentagon over the next five years.
* The report indicates that Defense Secretary Pete Hegseth instructed senior officials to implement an 8% annual reduction in defense spending, potentially totaling tens of billions of dollars.
* Palantir, which provides AI software for government surveillance, relies heavily on Department of Defense contracts for a significant portion of its revenue.
* Despite Wednesday's decline, PLTR has surged over 48% year-to-date and remains the second-best performer in the S&P 500, with an annual gain of more than 350%.
* Palantir did not immediately comment on the proposed budget cuts.
* The company is reportedly in discussions with competitors like Anduril to form a consortium for government contract bids.
* The 17 categories exempted from the proposed cuts include U.S. border operations and munitions acquisitions.