By Krystal Hur

The selloff in Palantir Technologies shares is gaining steam.

The data-analytics company's stock has been a wildly popular play among retail investors and is often prone to sharp price swings.

That has been particularly evident recently. Shares of Palantir fell about 8% to $93.47 on Monday, on pace to extend their losing streak for a fourth consecutive trading session.

Among the factors battering the stock? Analysts are worried about potential U.S. defense spending cuts, chief executive Alex Karp's new stock-trading plan and the stock's eye-popping valuation.

Palantir's stock recently traded at roughly 165 times its expected earnings over the next 12 months, well above the S&P 500 index's multiple of 22 times, according to FactSet.

Options traders are also piling into bearish bets on the stock, potentially accentuating swings in the stock price.

In recent days, some of the most actively traded Palantir options contracts have been puts tied to shares falling to $85 and $80, according to Cboe Global Markets data. Puts confer the right to sell a stock at a set price.

Shares of Palantir are still up about 23% so far this year. For more on the outlook for defense spending, see this column from Heard on the Street:

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(END) Dow Jones Newswires

February 24, 2025 11:34 ET (16:34 GMT)

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