Palantir Technologies Inc.'s stock experienced a significant decline, dropping over 25% in two days, triggered by reports of potential defense budget cuts by the Trump administration. The stock fell more than 10% on Wednesday and an additional 10% on Thursday, following a Washington Post report that the Pentagon was instructed to plan for an 8% annual reduction in defense spending over the next five years. This news raised concerns about Palantir's revenue, as 55% of its income comes from government contracts, predominantly from the U.S. Department of Defense. Despite the sell-off, Wedbush analyst Dan Ives expressed confidence in Palantir's resilience, suggesting that the company's unique software approach could lead to increased budget allocations at the Pentagon. Additionally, the company disclosed that CEO Alex Karp could sell up to 10 million shares over the next six months, contributing to the stock's volatility. The stock, which had reached a high of $125, dropped below the $100 level. Stephen A Cohen, another insider, also plans to sell 405,000 shares valued at approximately $41.85 million. Palantir's stock had previously surged, gaining over 48% year-to-date in 2025 and more than 300% over the past year.