Palantir Technologies(PLTR) ZACKS·2025-02-25 19:00Core Viewpoint - Palantir's stock has experienced a significant decline of up to 25% over the past week due to CEO Alex Karp's new stock trading plan and the Pentagon's directive to reduce the U.S. defense budget by 8% annually for the next five years [1][3]. Group 1: Stock Performance and Market Position - Palantir's share price dropped approximately 10.5% on February 24, 2025, and further retreated by about 3.3% in after-hours trading [1]. - Prior to this decline, Palantir had been one of the strongest-performing U.S. stocks over the past two years, with a year-to-date increase of nearly 20% [4]. - The company has a market capitalization exceeding 828 million, with adjusted earnings of 14 cents per share [4]. - Palantir's price-to-earnings ratio stands at 247.20X, significantly higher than the industry average of 12.92X [4]. Group 2: CEO's Stock Sales Plan - CEO Alex Karp's new trading plan allows him to sell nearly 10 million shares over the next six months, as disclosed in a recent regulatory filing [2]. Group 3: Pentagon Budget Cuts - The Pentagon's current budget of approximately 1 million [6]. - The company is looking to expand its presence in commercial markets while maintaining a strong government customer base [7]. - Palantir is in discussions with other leading defense technology companies to form a consortium for bidding on U.S. government contracts [7]. Group 5: Investment Considerations - Palantir's stock is categorized as high-growth and is part of a top-ranked technology services industry, which may still present investment opportunities despite potential defense budget cuts [8]. - Wall Street analysts have set an average price target of 18.00 to a high of $125.00 [10]. - Investors may consider PLTR-heavy exchange-traded funds (ETFs) to mitigate company-specific risks while capitalizing on Palantir's growth potential [11].