Palantir plunges as Trump trades unravel

Palantir is again flirting with its deepest daily drop since last May — last Thursday’s drop of 10.7% came close — amid a growing sell-off in so-called Trump trades, assets including Palantir, Tesla, bitcoin, and others that soared following his victory in last year’s presidential elections but have crashed in recent weeks.

Palantir’s drop on Monday came with relatively little news to explain it. But in recent weeks, the shares have come under pressure following reports of planned deep cuts to defense spending (Palantir’s top customer is the US government) as well as on going stock sales by company insiders.

More broadly, the data analytics and AI software company’s plunge is part of a broader breakdown in momentum stocks and a reversal of prices for Trump-related assets since the market topped back on February 19.

Such companies often have political, ideological, or financial ties to the administration. Palantir’s single largest shareholder is Republican megadonor Peter Thiel, who has a stake in the company worth more than $6 billion. Tesla CEO Elon Musk was an outspoken Trump supporter before taking on a role as the de facto head of the Department of Government Efficiency. Other companies, like federal immigration contractor GEO and Taser maker Axon, were expected to benefit from increased focus on immigration enforcement. And bitcoin and other cryptocurrencies were supposed to be a big beneficiary of administration policies.

But growing investor concerns about the impact of tariff policy, deterioration of consumer sentiment, and rising chatter about a potential economic downturn, as well as a somewhat lackluster approach to crypto from the administration, seem to have taken much of the excitement out of those bets.