Palantir Technologies has experienced a notable decline in its stock value, losing over 25% in a week amid news of impending Pentagon budget cuts. The Defense Secretary's announcement of an 8% reduction in defense budgets raises concerns, particularly given that 40% of Palantir's revenue comes from government contracts. The sentiment around AI stocks has also diminished, influenced by recent actions from major corporations. Furthermore, CEO Alex Karp's plan to liquidate $1.2 billion in shares by 2025 adds to the negative outlook on Palantir's stock performance.
"The biggest bearish catalyst was the U.S. Defense Secretary Pete Hegseth announcing plans for an 8% reduction in defense budgets over the next five years, which will significantly harm Palantir as government contracts constitute 40% of the company's revenue."
"Alex Karp has a trading plan that will allow $1.2 billion in shares to be sold by September 2025, adding downward pressure to Palantir's already declining stock price."
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