Why Palantir Stock Is Sinking Today
Key Points
Palantir stock is losing ground following a new executive order signed by President Trump.
The order asks artificial intelligence companies to participate in a program that involves submitting AI models to the government ahead of release.
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Palantir (NASDAQ: PLTR) stock is moving lower in Tuesday's trading. The company's share price was down 5.3% as of 3 p.m. ET and had been off as much as 6.8% earlier in the session.
Palantir's valuation is moving lower today amid a broader pullback in artificial intelligence (AI) stocks, spurred by a new executive order signed by President Donald Trump. As of this writing, the stock is now down roughly 14% year to date.
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AI stocks fall on Trump's latest executive order
Valuations for many AI companies are heading lower in response to a new executive order signed by President Trump today. The order requests that AI companies provide models to the U.S. government for assessment prior to release. While the executive order does not mandate that companies provide their tech to the federal government for review, investors are worried that it could indirectly create new informal responsibilities that could cause problems down the road.
What does the order mean for Palantir?
The new executive order requests that companies take part in a new benchmarking program to evaluate their capabilities and whether or not it falls under the banner of a "covered frontier model." As part of the program, companies would provide the government with access to models up to 30 days prior to their broader release and give the government influence in selecting partners that could receive the models in early access.
The new order seems heavily focused on ultra-high-performance AI software from companies including Palantir and Anthropic. Given the importance that government business relationships hold for Palanitr, the company could be under more pressure than most when it comes to participating in the program. On the other hand, the new order may wind up presenting little in the way of real headwinds for the business.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
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