Palantir Stock Drops 13% Amid Defense Budget Cuts, Analyst Concerns

Palantir Technologies (PLTR) has seen its stock drop approximately 13% over the past five trading days, primarily due to concerns over potential U.S. defense budget cuts of 8% annually announced by the Trump administration, which could negatively impact the company's revenue from government contracts. Analysts have mixed reactions, with Jefferies' Brent Thill reiterating a Sell rating, while Wedbush's Daniel Ives suggests the market's reaction is an overreaction, arguing that Palantir's unique software position may actually benefit from a more scrutinized defense spending environment. Additionally, Palantir's CEO, Alex Karp, plans to sell around $1.2 billion in stock, further contributing to investor anxiety. The stock's decline was exacerbated by a broader selloff in the market, influenced by Walmart's weak earnings forecast, which also dampened investor sentiment across other sectors. Overall, the consensus on PLTR stock remains neutral, with a Hold rating reflecting three Buys, nine Holds, and three Sells. The average price target for PLTR suggests a further downside risk from current levels.