Palantir Stock Stares At More Losses, But Analyst Calls It ‘Game-Changing’ Software Play - Retail Mood Sours

Investors did not take kindly to CEO Alex Karp's new stock trading plan and remained concerned about the impact of a potential defense spending cut on the company.

Palantir Tecchnologies, Inc. (PLTR) stock is poised to extend losses as investors fret over CEO Alex Karp’s amended stock-trading plan and the rumored Department of Defense spending cuts.

On Wednesday, Palantir stock shed 10.08% before ending at $112.06, retreating from its previous session's all-time closing high of $124.62.

The Denver, Colorado-based artificial intelligence (AI)-powered data analytics company revealed in a filing with the SEC late Tuesday that on Dec. 11, the CEO adopted a new Rule 10b5-1 trading plan to sell up to 9.975 million shares through Sept. 12, 2025. 

The new plan replaced the one adopted on Dec. 12, 2023, and allowed the sale of up to 48.9 million shares.

Applying Wednesday’s closing price of $112.06 for Palantir stock, the new plan is worth $1.12 billion in proceeds. 

The stock also reacted negatively to a Washington Post report that said Defense Secretary Pete Hegseth and the other defense department officials worked on a plan to cut the defense budget by 8% each of the next five years. The Post cited a Tuesday memo, which said the plan would be drawn up by Feb. 4.

The rumored move would be negative for Palantir, which is harboring an ambitious plan to snare away business from big defense technology companies. A Financial Times report said in late December that Palantir, along with privately held Anduril, was in talks with other industry players to form a consortium to jointly bid for Pentagon contract.

Palantir’s recent quarterly results showed that 41% of its fourth-quarter revenue came from the U.S. government.

On Stocktwits, retail sentiment toward Palantir stock turned ‘extremely bearish’ (24/100) from the ‘neutral’ mood that prevailed a day ago. As the retail continued to chat about these twin risks, the message volume stayed at a ‘high’ level.

The stock is the platform's most trending and active ticker early Thursday.

A bearish retail watcher expects a further decline in the stock price. Another user pointed out that despite Wednesday's plunge, the stock is still at overbought levels.

In other news, Loop Capital initiated coverage of Palantir stock at a ‘Buy’ with a $141 price target, TheFly reported. Analyst Mark Schappel said Palantir has all the hallmarks of becoming a “game-changing software stock,” given its massive market, category leadership, and strong execution.

In premarket trading, Palantir stock fell 2.95% to $108.75, but it is up 48% for the year-to-date (YTD) period.

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