$PLTR - Expensive, Overbought and Valuation Ready to Pop

I know Palantir PLTR has earned a cult following as an "AI leader play" aside from $NVDA. I successfully traded this to the upside but right now the stock valuation is detached from reality.

With a trailing P/E near 600× and a forward P/E still above 240×, investors are pricing in decades of flawless execution and hyper-growth. While revenue growth remains steady around 30% YoY, that pace is not extraordinary compared to other enterprise software names trading at a fraction of Palantir’s multiples. Even industry leaders like MSFT trade at a lower valuations ratios despite broader market reach and deeper moats.

I'm concerned of PLTR 's reliance on government contracts. Risks such as political shifts, budget tightening and contract delays could quickly hit the growth. The imbalance between valuation and fundamentals makes this stock fragile.

Technically, the chart reflects euphoric buying. Price is extended very well above our major moving averages and momentum is fading as stochastics roll over from overbought territory.

If PLTR slips below key support levels, momentum traders could unwind positions rapidly, amplifying downside. With fundamentals stretched and technicals overheated, PLTR looks less like a growth stock and more like a speculative bubble vulnerable to sharp mean reversion.

PLTR first support right now is at around $166 (50EMA) while the major support lies at around $151. Once that $166 (50EMA) becomes the resistance, I will take a short position here. I will also get a $155 put strike with Oct10 exp. My trade plan for these long puts is if my premium is down by 30% I'll take it out. It means my option play isn't working. Managing the risk is the only way to survive this zero sum game. Good luck and God bless everyone!