Palantir shares fell 10% on Wednesday, and continued to slide in after-hours trading, following a report that US Defense Secretary Pete Hesgeth plans to slash military spending.

Palantir, which has seen its stock soar by almost 50% this year, is a major US defense contractor in addition to selling its technology and artificial intelligence products to other allied governments and private companies.

“Palantir’s US government segment growth — more than 40% in the past two quarters — may have much greater exposure to any cuts in the US defense budget,” Bloomberg Intelligence analyst Mandeep Singh wrote in a note. He added that the government sales make up more than half of the company’s total revenue.

Palantir has closely linked itself to the US government. This week, Chief Executive Officer Alex Karp came out with a new book calling for more patriotism from Silicon Valley, and for tech companies to seek closer ties to the US.

On Wednesday, the Washington Post reported that Hegseth has ordered senior military leaders to develop plans for cutting 8% from the defense budget in each of the next five years, according to a memo sent to senior officials. Bloomberg previously reported news of the intended cuts, before distribution of the memo.