TLDR
- Palantir (PLTR) CEO Alex Karp sold another $45 million worth of shares, adding to $2 billion sold in 2024
- Multiple company insiders have been aggressively selling shares, sending negative signals to retail investors
- PLTR stock has fallen 30% from its 52-week high, with shares down 10.8% in a recent trading session
- Analysts maintain a Hold consensus rating with an average price target of $95.33, suggesting 10.9% upside
- Concerns include potential defense spending cuts, slowing headcount growth, and a high forward P/E ratio of 162
Palantir Technologies has faced significant pressure on its stock price as CEO Alex Karp continues his selling spree. The data analytics company’s shares tumbled amid broader market declines and growing investor concerns.
Karp sold another $45 million worth of Palantir stock over the past two weeks. This latest transaction adds to the approximately $2 billion in shares he sold throughout 2024.
The CEO’s recent sales bring the total percentage of his stake sold to 21%. Karp has also announced plans to sell up to 9.975 million additional PLTR shares by September 2025.
The selling activity isn’t limited to just the chief executive. Other Palantir insiders have also been offloading their shares at an aggressive pace.
This wave of insider selling has sent concerning signals to retail investors. These individual investors have been a major driving force behind Palantir’s impressive stock rally over the past year.
As a result of these developments, Palantir’s shares have dropped 30% from their 52-week closing high. In a recent trading session, the stock fell 10.8% to close at $80.42.
Market analysts have taken notice of the selling pressure. Marco Iachini of Vanda Research warned that Palantir could be especially vulnerable to losing retail investor momentum.
Iachini specifically noted that if he were to “pick a single name that could be most at risk of an unwind, PLTR would be it.”
Palantir’s challenges extend beyond insider selling. The company faces potential headwinds from possible cuts to U.S. defense spending.
Possible cuts to U.S. defense budgets
Reports suggest there could be an 8% annual reduction in defense budgets. This would likely impact Palantir’s government contracts, which form a core part of its business.
The company’s annual report has raised additional concerns among investors. These include slowing headcount growth and the departure of Palantir’s chief accounting officer.
Another red flag is Palantir’s apparent over-reliance on its largest customers. This concentration risk adds another layer of uncertainty for investors evaluating the company’s prospects.
Valuation remains a key issue for analysts following the stock. Palantir currently trades at a forward price-to-earnings ratio of 162 times, suggesting the shares are priced for aggressive growth.
Despite these challenges, the average analyst price target stands at $95.33 per share. This implies a potential upside of 10.9% from current levels.
Wall Street remains divided on outlook
Wall Street remains divided on Palantir’s outlook. Analysts have assigned a Hold consensus rating based on four Buys, ten Holds, and four Sells in the past three months.
Some analysts remain supportive of the company’s long-term potential. Wedbush analysts recently reaffirmed their Buy rating despite post-earnings stock weakness.
The Wedbush team highlighted Palantir’s AI capabilities and involvement in key military projects. They believe these strengths could help the company win a larger share of government contracts even if overall budgets decline.
The stock’s recent decline comes amid broader market turbulence. The S&P 500 had fallen 7% from its February 19th close, while the Nasdaq Composite dropped 10% over the same period.
Despite the recent pullback, Palantir remains up 8.1% since the beginning of the year. However, at its current price, the stock is trading 34.8% below its 52-week high of $124.62 reached in February 2025.
Early investors in Palantir have seen substantial returns despite the recent volatility. Those who invested $1,000 in Palantir shares at its September 2020 IPO would now have an investment worth $8,559.
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