Palantir’s stock trades at a “frothy” multiple, but one former critic says his view on valuation has evolved somewhat.

Finally, a plan from the Pentagon -- a major Palantir customer -- to launch budget cuts was the element to send shares tumbling. Over the past two weeks, the stock has retreated more than 30%. Are investors right to worry about this potential headwind and stay away from Palantir, or is the stock a buy on the dip? Let's find out.

Investors in Palantir Technologies (NASDAQ: PLTR) have been on a roller-coaster ride lately as shares in the data analytics company have retreated by a whopping 32% from an all-time high of $124.6 reached last month.