Palantir shares plunge on news of Pentagon budget cuts order

Core Viewpoint - Palantir's share price experienced a significant decline of up to 12.5% following reports of potential cuts to the U.S. defense budget by 8% annually over the next five years, which could impact the company's defense-related contracts [1][2]. Company Summary - Palantir's share price closed at $112.06, reflecting a 10% drop on the trading day in question [2]. - The company has a market capitalization exceeding $255 billion and reported $828 million in revenue for the fourth quarter of 2024, with adjusted earnings of 14 cents per share [3]. Industry Summary - The current U.S. defense budget is approximately $850 billion, and plans for budget cuts have been ordered by Defense Secretary Pete Hegseth, with proposals due by the following Monday [2]. - The Trump administration has been actively pursuing government spending cuts, which may affect federal contracts and spending in the defense sector [3].