Palantir Stock Slides Amid Securities Fraud Investigation
Shares fall over 5% after a law firm announced it is investigating the data analytics company for potentially misleading investors.
Shares of Palantir Technologies Inc. (PLTR) fell sharply on Wednesday following news that the data analytics and software company is under investigation for potential securities fraud violations. The stock dropped 5.41% to close at $175.44 as investors reacted to the announcement from the DJS Law Group.
The investigation centers on allegations that Palantir may have made materially misleading statements to the investing public or failed to disclose critical information. According to a , the probe was initiated after a report raised concerns about the security of one of Palantir's key government projects.
At the heart of the matter are claims first highlighted in a Reuters report on October 3, 2025. The report detailed an Army memo that allegedly found "critical deficiencies in fundamental security controls, processes, and governance" within Palantir's NGC2 battlefield communications platform. The memo warned that these issues could expose the system to significant vulnerabilities, including insider threats and external attacks.
The public disclosure of such a significant investigation has prompted a swift reaction from the market, leading to increased selling pressure on PLTR shares. The inquiry raises concerns about potential legal costs, reputational damage, and heightened investor scrutiny for the company, which is known for its close ties to government and defense agencies. Adding to the pressure, another prominent investor rights firm, on behalf of Palantir investors, signaling widening legal challenges for the tech giant.