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Palantir Stock Falls 10% Amid Pentagon Budget Cut Concerns - EconoTimes


Palantir Stock Falls 10% Amid Pentagon Budget Cut Concerns - EconoTimes

Shares of Palantir Technologies Inc. (NYSE:PLTR) dropped 10% Wednesday after reports surfaced about the Trump administration instructing the Pentagon to prepare for major budget reductions. The Defense Secretary has directed an 8% annual cut in defense spending over the next five years, raising concerns about the potential impact on defense contractors like Palantir.

Despite strong performance -- up 65% year-to-date and surging 410% over the past year -- investors seized the opportunity to take profits. The sell-off highlights fears that reduced military spending could affect Palantir's government contracts, even though the company's AI-driven solutions are designed to enhance efficiency and cost savings.

Some analysts argue that Palantir's technology could benefit from the Pentagon's shift toward streamlined operations. CNBC's Jim Cramer expressed confidence in the company's resilience, stating, "Palantir will be back!!" signaling belief in its long-term growth prospects.

Investors will be closely watching how these budget cuts impact defense sector contracts and whether Palantir's AI capabilities will secure a greater role in military cost-cutting initiatives.

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