Palantir shares plunge on news of Pentagon budget cuts order
The share price of Palantir fell by as much as 12%.
The drop followed a report by the Washington Post that Defense Secretary Pete Hegseth has told top Pentagon brass to prepare to cut the U.S. defense budget by 8% each year for the next five years.
Palantir is best known for its contracting work providing software and technology services for defense agencies.
The share price of Palantir fell by as much as 12.5% Wednesday after a report that the Pentagon has been ordered to prepare to cut the U.S. defense budget by 8% each year for the next five years.
Palantir is best known for its contracting work providing software and technology services for defense agencies.
The Washington Post on Wednesday said Defense Secretary Pete Hegseth has ordered senior Pentagon leaders and other military brass to develop plans to slash the defense budget over the next half-decade. The budget for the current fiscal year is around $850 billion.
The Post reported that Hegseth ordered the proposed cuts to be drawn up by Monday.
Palantir closed trading Wednesday at $112.06 per share, a drop of 10%.
The company,
whose market capitalization tops $255 billion, in early February reported $828 million in revenue in the fourth quarter of 2024, with adjusted earnings of 14 cents per share.
The Trump administration has been engaged in a wide-ranging effort to slash government spending, and the number of federal government works, since President Donald Trump was inaugurated for a second non-consecutive term on Jan. 20.
Trump appointed Tesla CEO Elon Musk to oversee that effort, dubbed the "Department of Government Efficiency."
Musk and Trump have come under fire for their methods in achieving DOGE's goal, with some steps being challenged successfully in federal court.
On Tuesday, Palantir CEO Alex Karp, who co-founded the company with Peter Thiel, defended Musk during an appearance on CNBC's "Squawk Box."
"What the progressive left should be doing is saying, 'OK, Elon, you're clearly the most qualified person in the world to do something like this. We want a dialog with you about what you're doing, how you're doing,' " Karp said.
"I don't believe that's happened," he added
