Palantir Technologies Inc PLTR stock plunged 10% on Wednesday after CEO Alex Karp adopted a new trading plan to sell nearly 10 million shares over the next six months.
As if that wasn’t enough, reports surfaced that the Pentagon—one of Palantir’s biggest clients—has been ordered to prepare for steep budget cuts.
The sell-off began after Palantir disclosed Karp’s new trading plan in a regulatory filing. While routine for executives, the sheer volume of planned sales raised eyebrows. Karp’s move follows a meteoric rise in Palantir’s stock, which had surged nearly 50% year-to-date before Wednesday’s drop.
Palantir’s current price-to-earnings ratio of nearly 600-to-1 suggests the stock is priced for perfection—leaving little room for nerves.
Read Also: What’s Going On With Palantir Stock Thursday?
Pentagon Budget Cuts Add To The Pressure
The Washington Post reported that Defense Secretary Pete Hegseth ordered an 8% annual cut to the U.S. defense budget for the next five years.
Palantir, known for its defense contracts, could face headwinds if the budget axe swings. The proposed cuts, driven by Elon Musk‘s “Department of Government Efficiency” initiative, have already sparked legal challenges.
Palantir Stock Remains A Battleground
Palantir stock trades at $100, below its eight-day simple moving average (SMA) of $115.05 – a bearish signal. However, it’s still above the 20, 50, and 200-day SMAs, flashing multiple bullish signals.
Chart created using Benzinga Pro
The Relative Strength Index (RSI) sits at 52.07, nearing overbought territory, while the Moving Average Convergence/Divergence (MACD) indicator remains bullish at 10.16.
Bottom line?
Palantir bulls aren’t out of the game, but the battlefield just got a lot trickier.
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Overview Rating:
Speculative
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