If outspoken Palantir (PLTR) co-founder and CEO Alex Karp is uber-bullish about his secretive software company, he isn't showing it in his trades.

Karp has dumped $45 million worth of stock in the last two weeks after unloading about $2 billion in 2024, new research from Jefferies analyst Brent Thill reveals. Karp has sold 21% of his overall stake in Palantir.

The latest sale barrage comes after Karp recently adopted a 10b5-1 trading plan for the maximum sale of 9.975 million shares of Class A common stock. The trading arrangement will last until Sept. 12, 2025.

A plan of this kind allows insiders of public companies to set up a schedule to sell their shares over a period of time.

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REUTERS / Reuters

Other Palantir insiders have also been aggressively selling stock, according to Yahoo Finance data.

The flurry of sales has sent a negative signal to the retail investor community that has long propped up the momentum stock.

Shares have crashed 30% from their 52-week closing high on Feb. 18.

"Among the top retail-traded stocks, Palantir could be the most vulnerable to a loss of retail momentum. If I were to pick a single name that could be most at risk of an unwind, PLTR would be it," Vanda Research senior vice president Marco Iachini said.

The Palantir sell-off also reflects several factors.

The Department of Defense is reportedly eyeing an 8% annual cut in spending for the next five years. This is a potential blow to Palantir, which relies heavily on government contracts. The stock's surge up to its mid-February record highs had been driven, in part, by expectations that the Trump administration would ramp up defense spending.

"As Palantir has heavy exposure to US government spending/budgets there have been recent Street concerns that this spending backdrop will be a headwind to this tech stalwarts' growth profile in 2025 and beyond," said Wedbush tech analyst Dan Ives.

Palantir further raised fresh red flags in its annual report.

The company's headcount grew by just 5% in 2024 after declining 3% in 2023. Over the past two years, the company has added only 98 employees, Jefferies' Thill estimates.

Second, the company's chief accounting officer, Heather Planishek, stepped down on Feb. 24. The company's CFO, David Glazer, has assumed her responsibilities on an interim basis.

And third, Palantir continues to overly rely on its biggest customers for business — its top three customers accounted for 17% of revenue in 2024.

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"Our concerns about the runway for growth and product differentiation remain," RBC Capital Markets analyst Rishi Jaluria wrote in a client note. "We continue to see the risk-reward skewing unfavorable with shares trading at a premium multiple."

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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