Palantir Technologies Stock falls like a stone. Should you start buying?

Palantir technologies (Please 0.18%))) Start in 2025 and quickly recorded profits of more than 60%in less than two months, whereby he reached a 52-week high on February 18, but it has quickly withdrawn since then.

In particular, the Palantir share has violated 28% of its value since February 18. The strong decline in Palantir shares can sell Alex Karp to a combination of a potential reduction in the Pentagon budget in the next five years and the possibility of CEO, Alex Karp, Alex Karp. It is worth noting that Karp sold Palantir shares worth almost 1.9 billion US dollars last year, which used the breathtaking increase of the share in 2024.

These developments have recently triggered an important correction in Palantir shares, and this is not surprising if you take into account the expensive evaluation in which this software and analysis provider has acted. In addition, Palantir's next quarterly report is more than two months away. The outstanding rally of Palantir was driven in the last quarters through its stronger results and instructions. There is therefore the possibility that his film will continue for the next few weeks due to the negative mood.

But if this is actually the case, will it be a good idea for experienced long -term investors to buy this hot growth -sail person? Let us find out.

A potential reduction in the Pentagon budget is not necessarily a bad thing for Palantir

A press release from the US Department of Defense on February 20 shows that the reduction of the Pentagon aims to “shorten fiscal fraud, waste and abuse at DOD and at the same time find ways to reject the department's budget”.

Defense Minister Pete Hegseth points out that the Pentagon will reorganize and invest existing funds in areas that are considered important by the Trump administration. In addition, it is unlikely that areas such as rocket defense, drone technology and cyber security will be influenced by the Pentagon plan. An important reason why Palantir shares are immersed in the fact that they achieve a beautiful part of his income from the provision of software and analysis solutions to government agencies.

In the fourth quarter of 2024, for example, 55% of the income of the company was state. Palantir has made its name by building and providing software platforms for the US intelligence community and the forces. It is therefore easy to see why investors pressed the panic button after the Pentagon's announcement.

However, the focus of the Pentagon on increasing efficiency and continued expenditure for certain areas could be good for Palantir. This is because the company's artificial intelligence platform (AIP) should improve the decision -making functions and operational efficiency from both trading companies and government agencies. That is why the introduction of this platform has impressively strengthened in the last quarters.

In addition, Palantir's AI tools were urgently asked by the US armed forces that offer the company lucrative contracts in recent months. As a result, the state income of Palantir in the previous quarter rose faster of 40% compared to the increase in business sales by 31%. In addition, Palantir management remains optimistic about the current focus of the current administration in view of the current focus.

CTO Shyam Sankar replied to an analysis question about the company's latest earnings conference and noticed:

… [W]You feel a large amount of fear among the traditional system integrators and providers here (the traditional providers of the Monopson), but we are quite optimistic. And I think if you look at my comments in the past, even my latest testimony to armed forces in the Senate last week, Palantir's true competition is a lack of accountability in the government. These forever software projects forever, which cost an insane amount that does not provide any results, they are holy cows of the deep state.

He continued to highlight Palantir's ability to deliver results to too much less costs, which indicates that the cuts of the Pentagon may not hinder their prospects.

The commercial business has grown a solid pace

Palantir now has a flourishing trading business. Commercial sales rose impressive in the last quarter, and this trend is likely to continue because customers tend to use AIP after signing the first contract.

It is worth noting that the commercial customer of the Palantir rose by 52% to 571 last year, and an increase in the expenses of the new customers that they have brought on board could act as a tailwind for both its upper and lower lines. In addition, the larger offers that the Palantir customers now sign with the company led to an increase in the remaining deal in the last quarter to 5.4 billion US dollars.

This metric refers to the total value of the contracts that Palantir has not yet met at the end of a quarter. The growth of this metric exceeded the increase in the top line of Palantir in the last quarter compared to the previous year by 36%, which indicates that it now concludes more contracts than fulfilled. Therefore, investors would concentrate well on the overall picture, since the prospects of Palantir may not be influenced by the proposed cuts of the Pentagon.

Of course, the recent retreat made the stock a little cheaper, but it still has a massive bonus.

Data from Ycharts.

However, it can be a good idea to collect Palantirian stocks if it is still lower in the coming weeks. After all, the company is one of the leading actors on the market for lucrative AI software platforms, which in the coming years are intended for outstanding growth, which could help Palantir justify its expensive evaluation on the back of its robust economies.