(Bloomberg) -The shares of Palantir Technologies Inc. Fell by 10% on Wednesday and continued to slide on the trade after the hours, after a report that the American Minister of Defense Pete Hegseeth asked officials to make plans about reducing military expenses.
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Palantir, which has seen his shares rise by almost 50% this year, is a large American defense contractor. It also sells technology and artificial intelligence products to other Allied governments and private companies.
“The growth of the US government segment of Palantir – more than 40% in the last two quarters – can have a much greater exposure to cuts in the US defense budget,” Bloomberg Insticht analyst Maleeep Singh wrote in a note. He added that the sale of the government makes more than half of the total turnover of the company.
On Wednesday, the Washington Post reported that Hegseeth has instructed Senior Military Leaders to develop plans to cut 8% from the defense budget in each of the next five years, according to a memo sent to high officials. Bloomberg previously reported news about the intended cuts, before the distribution of the memo.
The cutbacks can have broad effects, especially if they focus on parts of the Pentagon that pay for legacy programs such as the F-35 Fighter Jet van Lockheed Martin Corp. must be replaced.
In a memorandum at the cutbacks, Hegseeth said that programs, including those linked to submarines, drones, ammunition and rocket defense would have been exempt. But precious weapon systems such as the F-35 were not closed, which increased the chance that major defense contractors such as Lockheed and Boeing Co. Being able to see fewer contracts in the future.
This week Palantir Chief Executive Officer Alex Karp came out with a new book in which it was called for more patriotism from Silicon Valley. He also insisted on technology companies to find closer ties with the US.
The company’s work of the company has contributed to the rising turnover in recent years and has helped to shed its shares in a tear. The shares won 340% last year, after a run -up of 167% in 2023.
Palantir was co -founded by Peter Thiel with the aim of preventing a repeat of the 9/11 attacks. The company’s software was first used by the American intelligence community before he spread to all branches of the military and allied defense groups.
