What's Going On With Palantir Stock Thursday?

Palantir Technologies Inc PLTR shares are trading lower Thursday, adding to losses from Wednesday due to the potential for new defense spending cuts.

What To Know: Palantir shares tumbled Wednesday afternoon after the Trump administration told senior officials at the Pentagon to prepare for sweeping budget cuts, according to the Washington Post.

Defense Secretary Pete Hegseth reportedly sent a memo to senior leadership of the U.S. military telling them to prepare for 8% budget cuts in each of the next five years.

Palantir generates a significant amount of its revenue from the U.S. government. In the company’s most recent quarter, U.S. government revenue increased 45% year-over-year to $343 million, while total revenue grew 36% year-over-year to $827.52 million.

Hegseth reportedly asked officials to come up with a plan for proposed cuts by Feb. 24. The memo also highlights 17 exempted categories including U.S. border protection, nuclear weapons and missile defense and drones and other munitions. The current Pentagon budget for 2025 is approximately $850 billion.

"The time for preparation is over — we must act urgently to revive the warrior ethos, rebuild our military, and reestablish deterrence," Hegseth reportedly said in the memo.

"Our budget will resource the fighting force we need, cease unnecessary defense spending, reject excessive bureaucracy, and drive actionable reform including progress on the audit."

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Wedbush analyst Dan Ives argued in an X post on Wednesday that the spending cuts are actually positive for Palantir.

“This Palantir sell-off is the bears trying to poke holes yet again in a transformational AI story that is getting stronger by the day. More focus on efficiency for the government between DOGE and DOD budget cuts is bullish for PLTR,” the analyst said.

Palantir shares may also be facing selling pressure on Thursday after CEO Alex Karp adopted a new 10b5-1 trading plan allowing him to sell up to 9.98 million shares by Sep. 12.

Loop Capital analyst Mark Schappel initiated coverage on Palantir on Thursday with a Buy rating and set a price target of $141.

PLTR Price Action: Palantir shares were down 5.69% at $105.68 at the time of publication Thursday, according to Benzinga Pro.

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