Palantir’s Record Growth Meets Mounting Resistance: From the White House to the AGM Floor

Palantir posts 85% revenue surge to $1.633B but stock drops 4.4% as Trump AI executive order and shareholder governance revolt weigh on sentiment.

Palantir delivered its strongest quarter ever, with revenue surging 85% to $1.633 billion, and raised full-year guidance by the biggest margin in company history. Yet investors sold the stock heavily as a fresh regulatory blow from President Trump collided with a governance revolt led by some of the world’s largest institutional shareholders. The net result: the shares tumbled 4.4% on Wednesday to €125.36, adding to a 5.3% slide the previous day.

Trump’s AI Executive Order Casts a Long Shadow

The immediate catalyst for the sell-off was an executive order signed Tuesday that mandates developers of powerful AI systems to voluntarily submit their models to government safety reviews up to 30 days before public release. Federal agencies are also required to establish benchmarks for cybersecurity risks and create a central “AI Cybersecurity Clearinghouse.” For a company that derives a significant portion of revenue from U.S. government contracts, the compliance burden could delay product launches and increase costs disproportionately compared to more diversified peers.

Palantir’s heavy reliance on federal clients makes it one of the most exposed stocks to the new regime. The order also grants the government a say in selecting early-access partners, adding another layer of uncertainty for a company that has long positioned its AI platforms as mission-critical for national security.

AGM Turns Into a Governance Flashpoint

The annual general meeting, held Wednesday, unfolded against a backdrop of unusual shareholder activism. Two proposals on the agenda — one calling for a human rights impact assessment, the other demanding greater transparency in political spending — have attracted broad institutional support. Norges Bank Investment Management, which manages Norway’s $2.3 trillion sovereign wealth fund, has declared it will vote in favor, joining a coalition of investors representing at least $336 billion in assets under management.

The push stems from concerns that Palantir’s software is used by governments and non-state actors to infringe on fundamental rights — freedom of movement, privacy, and due process. The New York City comptroller had already pressed the company in February to commission an independent human rights audit of its work with the Department of Homeland Security. The Dutch pension fund ABP has exited the stock entirely, and Norway’s Storebrand, overseeing roughly $109 billion, followed suit, citing sales to Israel for use in occupied Palestinian territories.

Despite the firepower behind the resolutions, they stand almost no chance of passing. Palantir’s dual-class structure, built around Class F shares, grants founders Peter Thiel, Alex Karp, and Stephen Cohen up to 49.999999% of total voting rights as long as they maintain minimum ownership thresholds. Even a supermajority of independent shareholders can be neutralized. The board has recommended voting against both proposals, arguing that Palantir is not a surveillance company, does not trade in personal data, and that legal and national security constraints limit what can be disclosed.

Other items on the AGM agenda include the election of seven directors, the ratification of Ernst & Young as auditor for fiscal 2026, and an advisory vote on executive compensation.

Michael Burry Stays Short, Calls the Stock a Sandcastle

Adding to the bearish chorus, hedge fund manager Michael Burry published a fresh critique in which he described a head-and-shoulders pattern on the chart as a signal of fading euphoria. His central complaint: valuation. Burry estimates Palantir trades at roughly 16 times its IV15 metric — a measure he has used before — and labeled the equity “a sandcastle,” propped up solely by the AI narrative.

Insider activity supports his caution. Over the past three months, insiders sold $422.5 million worth of shares without a single reported buy transaction.

Stellar Financials, but a Pricing Headache

Operationally, the numbers remain blistering. U.S. revenue jumped 104% to $1.282 billion, while the U.S. commercial segment alone soared 133% to $595 million. Adjusted free cash flow hit $925 million, implying a margin of 57%. Management raised the full-year revenue midpoint to $7.656 billion, representing roughly 71% growth. For the second quarter, the company guided between $1.797 billion and $1.801 billion.

The Pentagon has also thrown its weight behind Palantir by officially recognizing the Maven AI system as a Department of Defense program, locking it into military operations long-term. Contracts with the U.S. Army and the Department of Agriculture have been renewed.

Yet the cost side remains a drag. Stock-based compensation totaled $202 million in the first quarter alone, weighing on GAAP profitability and giving ammunition to skeptics who argue the headline earnings mask real cash costs. Competition from Microsoft Azure, AWS, Google Cloud, OpenAI, and Anthropic is intensifying, raising questions about pricing power and long-term margins. Analyst consensus remains “Moderate Buy,” but several houses have flagged risks to the profit outlook.

Technical Indications of an Overheated Rally

Wednesday’s decline still left the stock roughly 3% above its 50-day moving average of €121.48. But the relative strength index stood at 86.3 — a level deep in overbought territory that historically has preceded sharp drawdowns when negative news hits. Since the start of the year, Palantir shares are down 12.4%, while the S&P 500 has advanced.

The combination of regulatory friction, shareholder activism, insider selling, and extreme valuation multiples presents a formidable wall of worry, even as the underlying business continues to fire on all cylinders. Wednesday’s AGM gave institutional investors a stage to voice their concerns, but with founder control all but unassailable, the outcome was never really in doubt. The real test for Palantir is whether it can navigate the policy and perception headwinds without losing the operational momentum that has made it one of the market’s most polarizing AI bets.