Palantir Technologies (NASDAQ:PLTR) stock plunged 5% on Friday morning as investors assessed AI spending trends, CoreWeave's IPO turbulence, and a fresh note from Goldman Sachs revisiting its outlook but mantaining $80 price target.

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The AI-driven data analytics firm provides its AIP platform to help businesses consolidate and analyze vast datasets. The company also promotes its ontology framework, designed to integrate real-world entities, data, and operations.

Last month, Palantir posted a strong fourth quarter with earnings per share hitting 14 cents and revenue climbing 36% year-over-year to $827.5 million. AI product demand fueled much of the commercial segment's growth.

For 2025, Palantir projects revenue around $3.75 billion, exceeding analyst estimates. Commercial revenue is expected to jump 54% to $1.08 billion.

Despite a 20% year-to-date gain, shares have fallen 27% since mid-February. The stock's valuation, now at 477 times forward earnings, raises sustainability concerns. Nvidia (NVDA) trades at 38x, while Microsoft (MSFT) sits at 32x.

Investors remain wary of potential budget cuts at the U.S. Department of Defense, which accounted for 17% of Palantir's 2024 revenue. The stock remains volatile as AI market uncertainties persist.