Palantir Technologies (PLTR) stock is down today primarily due to concerns raised by the U.S. Army about significant security flaws in a battlefield communications system co-developed by Palantir and defense startup Anduril Industries. An internal Army memo flagged these issues as "very high risk," highlighting problems such as inability to control user access, lack of visibility into user activity, and doubts about software security. This created investor doubts about Palantir’s future defense contracts and overall security reputation. Additionally, insider selling by Palantir executives has added to the market unease. Despite Palantir and Anduril dismissing the claims as outdated and asserting that the security issues have been resolved, the news triggered a sharp drop in Palantir’s stock, which fell by about 7.5% to 8%, marking one of its largest intraday declines recently. The situation underscores investors' sensitivity to contract stability and security in Palantir’s business, especially given its heavy reliance on government defense contracts. This drop also coincides with a broader technology sector downturn fueled by valuation concerns and profit-taking. In summary, the stock decline today is mainly due to:

• U.S. Army memo highlighting serious security concerns in Palantir’s battlefield system
• Investor worries about contract risks and security reputation damage
• Insider selling by company executives
• Broader tech sector sell-off on valuation and risk concerns

Without clear reassurances and resolution communicated to investors, Palantir's stock may face continued pressure in the near term.