Shares of Palantir Technologies sank 5% to $134.59 on Thursday, extending a brutal week that has erased more than 16% since June 1, as the Dutch defense ministry's decision to phase out the company's software collided with a vicious Nasdaq selloff driven by higher-for-longer rate expectations.

• A NATO Ally Says It Wants Out Within Two Years

The Dutch Ministry of Defense is exploring alternatives to Palantir amid efforts to reduce European dependence on U.S. tech. State Secretary Derk Boswijk told parliament a "fully fledged alternative" must be available within two years.

The Dutch military has used Palantir's AI within NATO frameworks and for its elite Special Operations Command. While Dutch officials characterize the deployment as limited, the political signal is anything but small.

• Europe Is Lining Up Behind the Same Idea The Netherlands is not acting alone. The German military said it will not be contracting any U.S. companies, including Palantir, for its contracts.

Germany has already awarded a big-data analysis contract to French firm ChapsVision instead of Palantir, and a UK parliamentary committee called government dependence on the company's solutions an "unacceptable vulnerability."

Switzerland has rejected Palantir bids at least nine times due to security concerns, and Denmark is also seeking local alternatives. For shareholders, this pattern threatens to cap a growth market just as European defense budgets surge.

• The U.S. Business Is Booming — But Concentration Is the Tradeoff

Palantir reported 85% year-over-year revenue growth in Q1 2026, reaching $1.633 billion, with U.S. revenue up 104% to $1.282 billion.

U.S. revenue now constitutes 79% of total revenue. That dominance is a strength in the near term — but it means international setbacks hit the remaining growth runway hard. The UK segment grew to $427 million in 2025, yet the "rest of world" share has diluted from 33.7% in 2019 to just 16.3%.

• The Stock's Sky-High Valuation Leaves No Room for Geopolitical Risk

Palantir raised its 2026 revenue guidance to $7.65–$7.66 billion, implying 71% growth. Yet the stock trades at roughly 65 times forward sales — a level where any growth headwind gets punished severely. The current valuation embeds an optimistic scenario requiring roughly 25% annual earnings-per-share growth through 2035. A coordinated European rejection wouldn't dent this year's numbers, but it challenges the narrative that Palantir is an indispensable global defense utility — exactly the story that justifies today's price.