Palantir’s numbers are working. For the first time, the story is not.

Palantir faces pressure on two fronts: retail investors dumped $82 million in shares in the week through 13 May as they rotated from AI software into semiconductor and memory stocks, while Germany’s military formally excluded the company from its defence cloud procurement. Palantir’s Q1 revenue hit $1.63 billion (up 85% YoY) but the stock is down roughly 20% year to date. CEO Alex Karp criticised Germany’s stance in a Bild interview, comparing the debate to “conversations about witchcraft” and arguing that Palantir’s technology was proven in Ukraine. The Bundeswehr is testing three European alternatives: Almato, Orcrist, and ChapsVision.

Alex Karp has spent the past fortnight telling anyone who will listen that Palantir Technologies is indispensable. Retail investors and the German military have arrived at the opposite conclusion, and their timing is almost perfectly synchronised.

In the week through 13 May, individual investors were net sellers ...