Palantir Stock: Why One Analyst Says to Buy the Dip

(Image credit: Hollie Adams/Bloomberg via Getty Images)

Palantir Technologies (PLTR) stock is continuing to slide Thursday, bringing its week to date decline to more than 16% at last check. Weighing on the shares are CEO Alex Karp's plans to sell nearly 10 million PLTR shares and reports that Defense Secretary Pete Hegseth is calling for budget cuts.

In a filing with the Securities and Exchange Commission (SEC) on Tuesday, Palantir revealed Karp plans to sell up to 9.975 million shares of the company's stock over the next six months via Rule 10b5-1.

As Kiplinger contributor Robert Gorman explains in his piece on "For a Concentrated Stock Position, Ask Your Adviser This," Rule 10b5-1 trading plans "allow directors and officers to sell company stock during predetermined 'open windows' that normally occur outside quarterly earnings announcements or the dissemination of other new information to the public that could cause the underlying stock price to change significantly."

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While Rule 10b5-1 trading plans are common, it can sometimes spook investors when company insiders sell stock, particularly after a big run higher on the price charts. Indeed, Palantir shares have more than quadrupled in the past 12 months.

Adding to the skittishness, Defense Secretary Pete Hegseth reportedly ordered Pentagon and U.S. military leaders to develop plans to cut 8% from the defense budget in each of the next five years, according to The Washington Post, citing a memo it obtained and officials familiar with the matter.

In its fiscal year ending December 31, Palantir generated $1.2 billion in revenue from the U.S. government, representing 63.2% of its $1.9 billion in total revenue.

Is Palantir stock a buy, sell or hold?

Even with Palantir's impressive showing on the price charts, Wall Street is on the sidelines when it comes to the AI stock.

According to S&P Global Market Intelligence, the average analyst target price for PLTR stock is $87.38, representing a discount of more than 11% to current levels. Additionally, the consensus recommendation is a Hold.

But there are bulls to be found. Financial services firm Wedbush, for one, has an Outperform rating (equivalent to a Buy) and a $120 price target.

"Palantir remains one of our top names to own in 2025, and we believe this sell-off represents another opportunity with PLTR generating traction across both federal and commercial for its entire portfolio," says Wedbush analyst Daniel Ives.

Ives adds that "Palantir could be a trillion market cap over the coming years and shaping up to be the next Oracle (ORCL) or Salesforce (CRM) as the AI Revolution plays out." He calls these latest worries "noise" and believes PLTR's AI-driven future is "bright."

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.