Palantir Plummeted Today -- Is It Time to Buy the Artificial Intelligence (AI) Leader's Stock

Core Viewpoint - Palantir's stock experienced significant sell-offs due to CEO Alex Karp's plan to sell $1.2 billion in company stock and potential defense budget cuts, leading to bearish signals for investors [2][3]. Company Summary - Palantir's stock price fell by 10.1% in a single trading session, with a peak decline of 12.9% earlier in the day [1][2]. - The company's stock is still up approximately 360% over the past year despite the recent valuation retreat [3]. - Palantir's current valuation stands at about 203 times this year's expected earnings and 68 times this year's expected sales, indicating a high growth dependency [4]. Industry Summary - Reports suggest that the U.S. defense budget could face cuts of up to 8% annually over the next five years, which may negatively impact Palantir's public-sector demand [2][5]. - However, there is potential for increased demand for Palantir's software as the Department of Defense may focus on efficiency, possibly using the company's AI tools to identify spending reductions and automate tasks [5]. - Despite the risks associated with a growth-dependent valuation, the outlook for Palantir in the defense industry remains strong, with expectations of strong returns for long-term investors [6].