After surging more than 300% in 2024, Palantir (PLTR) has significantly underperformed the broader markets in the year to date. Valued at a market capitalization of $202 billion, Palantir stock is down almost 35% from its all-time high due to concerns over its valuations and the ongoing trade war.
However, investors are worried that potential federal spending cuts could threaten its largest customer base, as government sales accounted for 40% of the top line in Q4. According to an article from The Motley Fool, Palantir’s pricy products (averaging $4 million per customer) may face reduced demand during economic uncertainty. Finally, the stock’s extremely high price-sales ratio of over 60x makes it vulnerable to further corrections.
