Palantir Shares Drop Over 10% on Budget Concerns

Palantir Technologies experienced a significant stock drop of over 10% due to concerns about potential U.S. defense budget cuts, as outlined in a leaked memo from Defense Secretary Pete Hegseth. The cuts would see an 8% annual reduction over five years, impacting military contractors like Palantir, which relies heavily on U.S. government contracts for revenue. Despite the sell-off, Wedbush Securities analysts suggest that Palantir might benefit from more disciplined Pentagon spending and continued federal investments in AI. Additionally, CEO Alex Karp's plan to sell up to $1.2 billion in shares has added to investor worries. Even with the current stock downturn, Palantir has seen substantial growth, rising nearly 360% in the past year, though it remains a volatile investment. Analysts remain optimistic about the company's future, citing its potential to capitalize on AI-driven government efficiency initiatives.