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What Happened?
Shares of data-mining and analytics company Palantir (NYSE:PLTR) fell 14.5% in the morning session after CEO Alex Karp announced a plan to sell up to 9.98 million shares worth $1.2 billion. The sale is likely to hurt PLTR's stock price as the newly issued shares dilute the ownership of existing shareholders. Separately, Defense Secretary Pete Hegseth warned department officials at the Pentagon to prepare for budget cuts, signaling potential pressure on Palantir's government contracts and future growth.
The shares closed the day at $106.26, down 5.2% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Palantir? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Palantir’s shares are very volatile and have had 29 moves greater than 5% over the last year. But moves this big are rare even for Palantir and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 16 days ago when the stock gained 26.9% on the news that the company reported impressive fourth-quarter results, which blew past analysts' billings, revenue, and EPS estimates, amid encouraging AI demand. Both its commercial and government businesses posted strong double-digit growth. The government side remains the bigger earner, but the commercial division is gaining ground, especially in the U.S. There, commercial sales jumped 64% from a year ago and 20% from the prior quarter. Looking ahead, the outlook provided was also encouraging, with the company's 2025 revenue guidance exceeding expectations. Zooming out, we think this was an outstanding quarter.
After the solid results, several Wall Street firms upgraded their ratings. Morgan Stanley upgraded PLTR from Sell to Hold, adding, "Given the strength of the outlook, we acknowledge that we were wrong about our core fundamental catalyst of slowing growth below the 30% level due to the tougher compares in 2025.".
Palantir is up 40% since the beginning of the year, but at $105.26 per share, it is still trading 15.5% below its 52-week high of $124.62 from February 2025. Investors who bought $1,000 worth of Palantir’s shares at the IPO in September 2020 would now be looking at an investment worth $11,079.
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