• Palantir stock is falling today after Walmart issued sales guidance that raised broader economic concerns.

• Palantir stock has also been pressured by insider selling disclosures and defense spending cuts lately.

• While the stock is a risky play, Palantir still has the potential to be a massive long-term winner.

Palantir stock is getting hit with another day of substantial sell-offs on Thursday. The company's share price was down 5.17% .

Palantir's valuation is retreating today after Walmart issued sales guidance for this year that spooked Wall Street. On the heels of a 5.6% increase for its annual revenue last year, the retail giant only expects sales growth to be between 3% and 4% this year.

Walmart is the largest retailer in the U.S., and investors often look to the company's quarterly reports, commentary, and guidance for indicators about the health of the overall economy. So while Palantir's business has limited immediate connections to Walmart, the retailer's results and performance outlook can have a significant impact on overall valuation trends across the stock market.

The disappointing sales guidance also comes on the heels of other recent bearish catalysts for the artificial intelligence (AI) software leader. CEO Alex Karp recently disclosed plans to sell 1.2 million shares of company stock over the next six months, and the Department of Defense (DOD) has been ordered to move ahead with $50 billion in budget cuts for next year.

Is Palantir stock a buy on the pullback?

With today's sell-off, Palantir stock is now off roughly 16% from its high. On the other hand, the company is still up roughly 328% over the last year alone -- and it's valued at approximately 189 times this year's expected earnings and 65 times expected sales. Even in the context of its strong sales and earnings growth, the company's valuation profile sets the stage for big pullbacks in conjunction with unfavorable macroeconomic shifts and business-specific developments.

Even with today's pullback, the case could be made that Palantir stock is still priced for near-perfection in the near term. On the other hand, I think the stock still offers explosive upside potential for long-term investors at current prices.

Palantir is posting fantastic margins and strong sales growth, and it occupies a leading position in its corner of the AI market. With long-term demand indicators in both the public and private sector looking promising, I believe the stock is a worthwhile buy-and-hold play. Today, Palantir has a market cap of roughly $245 billion, but I expect it will be able to hit a $1 trillion market cap by 2030.