Palantir (PLTR) shares fell 13% Tuesday afternoon as investors scrutinized the company's valuation and sales from international businesses, and even its first-quarter revenue wasted Wall Street forecasts.

Palantir's first-quarter revenue in its international business sector (selling software to foreign businesses) fell 5% in the first quarter compared to last year. The division's $142 million revenue was lower than Wall Street analysts' expectations of $160 million.

Europe has dropped its share of revenue from 16% in the first quarter of 2024 to 10% in the most recent quarter.

"Europe hasn't got AI yet," CEO Alex Karp said on the company's tribute call.

Since 2023, Palantir executives have noticed difficulties in the market as large-scale investments in AI are being made and facing slowing GDP growth.

"We've seen some early signs of investing in AI in Europe, but now it looks like Europe is already far behind the United States and China, who have invested hundreds of billions of dollars in AI infrastructure," Gil Luria told Yahoo Finance in an email Tuesday.

European companies are increasingly looking to spend money on local AI technology companies as they seek technological “sovereignty” from the United States. Additionally, Luria said Palantir "consistent with the Trump administration may be a problem for some European buyers".

Palantir benefits from the Trump administration’s controversial immigration agenda. Recently, it signed a $30 million surveillance immigration contract with ICE, which has raised concerns about potential rights violations and strong opposition from former employees. The company also awarded a $178 million contract by the U.S. Army in March to develop AI military trucks.

He supported Kamala Harris during last year's presidential election, but Karp called Trump "a brilliant" and praised his cost-cutting agenda through the newly formed Doge Department of Government Efficiency.

Palantir stock's earnings result rose by more than 60% this year. Even on Tuesday's decline, the stock has risen more than 45% in the past month alone.

Overall, Palantir's first-quarter revenue exceeded analyst expectations. Palantir's revenue during the March period was $884 million, up 71% from the $863 million expected by Wall Street analysts, whose U.S. commercial operations grew 71%, the company sold data analytics software for AI fuels to companies such as Citi, Hertz and BP, and the company earned 45% of revenue from U.S. government contracts.