Palantir at $87: Why This Dip Is a Golden Buying Opportunity

• Palantir Technologies Inc. saw its stock plummet recently, falling to $87 per share after a wave of market jitters tied to CEO Alex Karp’s planned share sale and whispers of Pentagon budget cuts.

• The market’s response seems exaggerated, with Karp’s sale being a scaled-back plan and defense cuts potentially favoring Palantir’s strategic focus amid shifting priorities.

• Palantir’s robust fundamentals—AI leadership, growing government contracts, and commercial expansion—make this pullback an enticing entry point for investors with a mid-to-long-term horizon.

• This dip offers a chance to buy into a company poised to benefit from increased IT spending and its ties to influential figures like Elon Musk.

As of today, February 25, 2025, Palantir Technologies Inc. (NASDAQ:PLTR) has taken a hit, with its stock price sliding to $87 per share following a turbulent week. The drop kicked off after news broke of CEO Alex Karp’s intent to offload up to 9.975 million shares over the next six months, a move that could net him over $867 million at current prices. This came via a regulatory filing, though it’s worth noting he scrapped an earlier, heftier plan to sell nearly 49 million shares—context that softens the blow despite the initial panic. Then came reports of potential Pentagon budget cuts, with Secretary Pete Hegseth pushing for an 8% annual reduction over five years. Investors flinched, fearing Palantir’s lucrative defense contracts might take a hit. But here’s where I see the disconnect: the cuts target “low-impact” initiatives like diversity programs, not the AI and data analytics Palantir brings to the table. If anything, a realignment toward modernization and missile defense—areas Trump’s administration is prioritizing—could mean more business for Palantir, not less.

The numbers back up the optimism. Palantir’s stock may be down from its peak, but its fundamentals haven’t budged. The company’s leadership in AI-driven solutions, bolstered by its Artificial Intelligence Platform (AIP), keeps it ahead of the curve. Its integration of advanced models like Elon Musk’s Grok from xAI only widens that lead, setting it apart from competitors like Microsoft. Government contracts with the Department of Defense and the U.S. Army remain a bedrock, and commercial growth is picking up steam. Posts on X echo this sentiment, with users pointing to Palantir’s free cash flow growth and high margins as signs of a “long-term winner.” Sure, the stock’s valuation isn’t cheap—trading at a forward P/E of around 162 and an EV/Sales multiple far above the sector norm—but quality tech rarely comes at a discount. History shows Palantir’s knack for rebounding from dips, like when it fell from $29 to under $9 between 2021 and 2022, only to roar back as revenue multiples tightened.

Then there’s the Musk factor. Karp’s vocal support for Elon Musk, now heading the Department of Government Efficiency (DOGE), ties Palantir to a broader narrative of disruption and efficiency in government spending. Musk’s influence could steer budgets toward tech solutions like Palantir’s, especially as DOGE slashes wasteful contracts—$420 million already axed in its first week. Karp’s praise for Musk as a “builder” and his enthusiasm for “whatever is good for America” signal a synergy that could pay off. Analysts like Wedbush’s Dan Ives see this sell-off as a chance, holding firm on a $120 price target. Wall Street’s consensus leans cautious, with a mix of hold and sell ratings, but the median price target has climbed to $95—still above today’s $87. For me, this isn’t about next week’s bounce; it’s about 2027 and beyond. Palantir’s role in the AI revolution and its sticky contracts make it a stock worth grabbing while the market’s still wringing its hands.

TL;DR: Palantir’s drop to $87 is a buying opportunity. The market overreacted to Karp’s share sale and budget cut fears, but the company’s AI dominance and potential budget wins make it a solid long-term bet.