Palantir Plunges as Pentagon Faces Budget Cuts
Palantir Technologies (PLTR) experienced a sharp decline of 10.08% on Wednesday, largely attributed to news of impending Pentagon budget cuts.
The Washington Post reported that Defense Secretary Pete Hegseth has directed a plan to reduce the defense budget by 8% annually over the next five years. This could potentially equate to billions of dollars in cuts, affecting various defense industry contractors.
Palantir, a provider of AI surveillance software for the US government, relies heavily on government contracts, particularly from the Department of Defense. Over half of its revenue in the recent quarter stemmed from such contracts.
Despite the recent decline, Palantir's stock has surged over 48% year-to-date, making it one of the top performers in the S&P 500. However, the company faces potential headwinds due to the anticipated budget cuts.