Palantir Stock Plummets 10% Amid Pentagon Budget Cuts

Palantir Technologies (PLTR) is facing significant stock declines, with shares dropping more than 10% on Monday and over 25% since last week, largely due to anticipated Pentagon budget cuts. The Department of Defense announced plans to reduce its $850 billion defense budget by 8% annually over the next five years, raising concerns about the impact on Palantir's revenue, which relies heavily on government contracts. Analysts have noted that approximately 42% of Palantir's income comes from these contracts, prompting investors to reevaluate their positions. Despite some analysts expressing optimism about Palantir's ability to adapt to budget changes, the overall sentiment remains cautious as the company transitions from a government-focused data specialist to an AI software provider. The recent volatility marks a stark reversal for Palantir, which had previously seen its stock reach all-time highs. Investors are now closely monitoring how these fiscal changes will affect both government and commercial revenue streams.