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Palantir ( PLTR ) stock tumbled 10% on Monday to extend a four-day drop amid investor concern surrounding potential Pentagon budget cuts and their impact on the data software company's revenue.

Shares have fallen more than 20% since last Wednesday, when the stock tumbled on a Washington Post report that said Defense Secretary Pete Hegseth sent a memo to Pentagon and military leaders looking to slash 8% from the defense budget every year over the next five years.

Some 17 categories would be exempt from the cuts, including US border operations and munitions acquisitions, according to the Post.

The stock has also been under recent pressure amid heightened worries about insider stock selling . The company revealed last week that its CEO Alex Karp adopted a 10b5-1 trading plan for the maximum sale of 9.975 million shares of Class A common stock. The disclosure could indicate that Karp views the stock as overvalued.

The decline in Palantir stock is a major reversal for the AI software high flyer, which, up until last week's decline, was touching all-time highs on the heels of a massive rally.

Palantir makes artificial intelligence software used for surveillance by the US government. As Yahoo Finance's Laura Bratton reported, more than half of the company's revenue in its most recent quarterly earnings report came from global government contracts, driven by increasing spending from the US Department of Defense.

Last Thursday, Wedbush analysts Dan Ives talked up the the company's ability to navigate the cuts, writing "Palantir's unique software approach will enable the company to gain MORE ... budget dollars at the Pentagon ... not less despite these initial knee jerk reactions from the Street."

Wall Street analysts note Palantir's software is well positioned given the current administration's Department of Government Efficiency (DOGE) efforts.

"We highlight that the company has also been openly supportive of DOGE, and views its AI software as a competitive advantage, and aligned with DOGE’s efficiency programs," CFRA equity analyst Janice Quek said in a note on Friday.

@ines_ferre .