Palantir's stock declines 37% due to growth slowdown

Palantir's stock is down 37% from its peak of about $125 on February 18. The decline follows a period of hype around generative AI and political developments, but the company's growth has slowed significantly. Since its IPO in 2020, Palantir has struggled to maintain momentum. Revenue growth dropped from 47% in 2020 to 29% in 2024, despite the AI boom. The company's reliance on government contracts, which made up 42% of its revenue, poses additional risks as federal spending is expected to decrease. Palantir's high stock valuation, with a forward price-to-earnings ratio of 135, does not reflect its challenges. The combination of slower growth, high stock-based compensation, and potential revenue cuts from government clients raises concerns about the company's future performance.