Palantir slides 5% as UK regulator reviews NHS contract metrics

Palantir Technologies Inc. fell 4.9% to $126.12 after the UK statistics regulator raised concerns over how NHS England presented performance metrics tied to the company's Federated Data Platform contract.

"We cannot draw conclusions about cause and effect as other variables have not been controlled for," NHS England said in a June 6 update to its methods page, following Freedom of Information requests regarding FDP data analysis, the Office for Statistics Regulation said Wednesday.

The decline added to a 33% year-to-date drop for the Denver-based data analytics company, which now trades 17% below its 200-day moving average of $154.84. The technology sector was the weakest in the S&P 500 on Wednesday, falling 0.4%, while the broader index gained 0.11%.

The regulatory scrutiny threatens Palantir's marquee NHS contract, a key reference client for its government data platform business, as the company approaches its Aug. 3 earnings report where analysts project earnings per share of 33 cents on revenue of $1.81 billion. An open-source intelligence tool published on GitHub that replicates aspects of Palantir's core capabilities has added to investor concerns about competitive pressure.

The OSR said NHS England committed to placing caveats on its main FDP website and commissioning Imperial College to conduct an independent academic evaluation of the platform. Jo Maugham, executive director of the Good Law Project, said Palantir "is not — and frankly never has been — a company that can be trusted with this nationally important contract."

Regional NHS organizations have also pursued alternative approaches. Greater Manchester's integrated care board declined the platform, instead relying on capabilities developed with local universities and companies, according to a July 20 letter in the Guardian from Dr. Devan Moodley, CEO of Health Connect Global.

Palantir's relative strength index stood at 47.37, neutral and consistent with a stock consolidating rather than trending. Key support sits at $122.50, with resistance at $136.50. Options activity on the Cboe reflected elevated implied volatility, suggesting traders expect significant price movement around the Aug. 3 earnings release.

Despite the recent weakness, Palantir continues to generate strong cash flow and maintains healthy profit margins, with long-term government contracts providing revenue visibility. The company's reliance on US government contracts and the potential for slower growth remain key risks to its valuation.

This article is for informational purposes only and does not constitute investment advice.