tech
Palantir faces investor exodus and German military rejection as narrative cracks
Palantir faces pressure on two fronts: retail investors dumped $82 million in shares in the week through 13 May as they rotated from AI software into semiconductor and memory stocks, while Germany’s military formally excluded the company from its defence cloud procurement. Palantir’s Q1 revenue hit $1.63 billion (up 85% YoY) but the stock is down roughly 20% year to date. CEO Alex Karp criticised Germany’s stance in a Bild interview, comparing the debate to “conversations about witchcraft” and arguing that Palantir’s technology was proven in Ukraine. The Bundeswehr is testing three European alternatives: Almato, Orcrist, and ChapsVision.
TL;DR
- Retail investors have been net sellers of Palantir shares, rotating into semiconductor stocks.
- Germany has officially excluded Palantir from its military contracts, prioritizing European alternatives for its defence cloud infrastructure.
- Palantir's CEO, Alex Karp, criticized Germany's decision, emphasizing the proven effectiveness of Palantir's technology in combat, particularly in Ukraine.
- Despite strong revenue growth and raised full-year guidance, Palantir's stock price has fallen year-to-date.
- Market skepticism is growing regarding Palantir's high valuation relative to its sales, with some investors and short-sellers calling it 'absurd'.
- Germany's decision is driven by a desire for national sovereignty and to avoid dependence on a foreign company for its military data infrastructure.