Palantir Stock Slumps as Pentagon Budget Cuts Loom

Current Market Status:

* PLTR: -8.67%
* NasdaqGS: 102.34 (-8.67%)

Reason for Decline:

* Washington Post reports that the Trump administration has instructed the Pentagon to plan for significant budget cuts over the next five years.
* Palantir's revenue heavily relies on government contracts, particularly from the Department of Defense.
* Potential cuts raise concerns about the company's future revenue streams.

Analyst Outlook:

Despite the sell-off, Wedbush analyst Dan Ives remains optimistic, stating that Palantir's unique software capabilities will enable it to secure more funding from the Pentagon.

Company Response:

* Palantir has not yet responded to Yahoo Finance's request for comment.

Other Key Points:

* Defense Secretary Pete Hegseth has proposed cutting 8% from the defense budget annually for the next five years.
* Some categories, such as border operations and munitions acquisitions, would be exempt from the cuts.
* Palantir is reportedly in discussions with competitors to form a consortium for government contract bids.
* Despite the recent decline, PLTR has performed strongly in 2025, rising over 48% and ranking as the second-best-performing stock in the S&P 500.