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Palantir Stocks Face Decline Amid Investor Concerns
On Thursday, Palantir Technologies experienced a significant drop in its stock price, as investors showcased growing apprehension regarding the once-esteemed favorite among retail traders. Shares plummeted by over 7%, following a previous decline of about 10% on Wednesday, marking Palantir’s most challenging day since May. This downturn occurred despite the shares reaching an all-time high earlier that same day.
The decline in stock prices coincided with increased scrutiny of a new stock sale strategy put forth by Palantir CEO Alex Karp, alongside comments from Defense Secretary Pete Hegseth about anticipated cuts in defense budgets. Such comments have intensified fears among investors about the stability of contracts with government agencies, which are critical to Palantir’s operations.
Retail Investor Enthusiasm Dimmed
Palantir has previously enjoyed notable traction among everyday investors, leveraging excitement surrounding artificial intelligence trends. It was recognized as the top performer in the S&P 500 last year, attracting a substantial following. Recent data highlights that Palantir ranks just behind tech giants Nvidia and Tesla in attracting net inflows from retail investors. Additionally, a report from JPMorgan revealed that the stock was among the most purchased by individual traders in the past week.
Two significant developments likely fueled Wednesday’s sell-off. First, Hegseth’s remarks about preparing to reduce defense budgets by 8% annually for the next five years have raised alarms regarding governmental contracts, which form the backbone of Palantir’s financial health. Nonetheless, Palantir’s leadership has remained optimistic about the potential value recognized by the newly established Department of Government Efficiency.
Secondly, Palantir’s regulatory disclosure indicated that CEO Karp intends to sell up to 10 million shares of the company’s stock within the next six months. Karp, known for his eccentric style and engaging communication with retail investors, has been seen as a crucial figure in maintaining interest in the company, evoking comparisons to Tesla’s Elon Musk.
Current Market Performance
As of now, Palantir’s stock is down approximately 11% for the week, although it has seen a notable rise of over 38% since the beginning of 2025, following an extraordinary growth of around 340% in the previous year. However, retail enthusiasm is not mirrored on Wall Street, where analysts, according to a poll conducted by LSEG, have largely maintained a hold rating on the stock. The average price target suggests a potential decline in the share value as market conditions evolve.
As the market reacts to both internal and external pressures, Palantir’s ability to regain its footing will be closely watched by retail investors and market analysts alike.
Source
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