Markets
markets
Luke Kawa

JPMorgan recommends bullish options bet on Micron ahead of earnings

JPMorgan equity derivatives strategists led by Bram Kaplan think Micron is poised to jump after it reports earnings on Tuesday after the close — but not by too too much.

Micron has had an exceptionally hot run lately. Before Friday’s drop, shares of the memory chip specialist enjoyed a record-winning streak buoyed by a bevy of positive news on AI data center spending.

Kaplan says options that encompass the reaction to Micron’s earnings look expensive, as they currently imply a move of plus or minus 9.6% versus an average absolute change of 7.4% over the past three years. And with such an explosive advance over the past few weeks, he reckons the odds of an outsized surge on earnings are not high.

“The company’s pre-announcement should partially de-risk the earnings print, which, along with our analyst’s $185 price target (~14% upside), gives us comfort selling deep upside, leading us to favor call ratios to position into earnings,” he wrote.

JPMorgan’s recommendation:

  • Buy one call option on Micron that expires this Friday with a strike price of $170, and

  • Sell two call options on Micron that expire this Friday with a strike price of $180.

This trade doesn’t cost anything in terms of premium; you actually get paid for putting it on. The potential downside is that significant losses could result in the event the stock goes parabolic this week.

The sell side anticipates that Micron will deliver adjusted diluted earnings per share of $2.84 on sales of $11.15 billion and adjusted gross margins of 44.5% in its fiscal fourth-quarter results on Tuesday, per analysts surveyed by Bloomberg.

JPM’s semiconductor analysts think that earnings and margins will exceed expectations, and guidance for the current quarter will also surprise to the upside. Commentary around margins, supply commitments, and the balance of supply and demand for high-bandwidth memory chips next year will likely be the key factors that drive the stock amid the release of earnings and the quarterly conference call, in their view.

“Given materially higher high bandwidth memory content for XPUs/GPUs shipped in calendar year 2026 vs. calendar year 2025, and likely upside to current XPU/GPU unit growth expectations for CY26 against a backdrop of rising hyperscaler capex budgets, our analysts see little risk of oversupply next year,” Kaplan wrote.

Kaplan’s got a hot hand when it comes to trade calls on semiconductor earnings: in early September, his bullish options recommendation on Broadcom ahead of its quarterly report delivered a return in excess of 450% after the AI chip designer unveiled a major new customer later reported to be OpenAI.

More Markets

See all Markets
Tasha Matsumoto
38m
Stocks post small loss, closing lower for the week

The Russell 2000 beat the S&P 500 for the 11th consecutive session, the longest streak of outperformance for small caps since 2008.

A brown bear reacts to a quadrocopter drone launched by a visitor in a shelter for bears rescued from circuses and private restaurants of Ukraine, near Zhytomyr, some 150 km west of Kiev, on March 24, 2017.
markets
Luke Kawa

How Claude Code “is the ChatGPT moment repeated” — and why that’s awful news for software stocks

The relentless slide in software stocks continues, with the iShares Expanded Tech Software ETF trading to the downside and lagging the market on Friday.

The growing adoption of Claude Code, and more recently, the launch of Claude Cowork by Anthropic, has been an attention-grabbing moment as to the power of AI agents and how they can be housed and operated solely under one highly integrated user interface.

To say that software stocks have fallen out of favor would be an understatement, as having this much industry-specific market pain is incredibly rare. Based on data going back to 2001, if IGV has fallen at least 5% over the past month, the SPDR S&P 500 ETF is typically also down between 5% to 6% over the same period. Less than 3% of the time does SPY rise at least 1% while software stocks have gotten slammed — 28 instances in total, going back to August 2001 — and three of those are the past three sessions. Their valuation compression has also been intense.

Doug O’Laughlin, president of SemiAnalysis, authored a thought-provoking piece on just how momentous this recent technological progress is along with his views on how AI agents will displace software and what disrupted companies can do adapt. A couple excerpts:

Assuming it improves, has harnesses, and can continue to scale large context windows and only become marginally more intelligent, I believe this is enough to really take us to the next state of AI. I cannot stress enough that Claude Code is the ChatGPT moment repeated. You must try it to understand.

One day, the successor to Claude Code will make a superhuman interface available to everyone. And if Tokens were TCP/IP, Claude Code is the first genuine website built in the age of AI. And this is going to hurt a large part of the software industry.

I believe that all software must leave information work as soon as possible. I believe that the future role of software will not have much “information processing”, i.e., analysis. Claude Code or Agent-Next will be doing the information synthesis, the GUI, and the workflow. That will be ephemeral and generated for the use at hand. Anyone should be able to access the information they want in the format they want and reference the underlying data.

What I’m trying to say is that the traditional differentiation metrics will change. Faster workflows, better UIs, and smoother integrations will all become worthless, while persistent information, a la an API, will become extremely valuable.

Claude Cowork the newest fuel for an AI-driven de-rating of software stocks

The growing adoption of Claude Code, and more recently, the launch of Claude Cowork by Anthropic, has been an attention-grabbing moment as to the power of AI agents and how they can be housed and operated solely under one highly integrated user interface.

To say that software stocks have fallen out of favor would be an understatement, as having this much industry-specific market pain is incredibly rare. Based on data going back to 2001, if IGV has fallen at least 5% over the past month, the SPDR S&P 500 ETF is typically also down between 5% to 6% over the same period. Less than 3% of the time does SPY rise at least 1% while software stocks have gotten slammed — 28 instances in total, going back to August 2001 — and three of those are the past three sessions. Their valuation compression has also been intense.

Doug O’Laughlin, president of SemiAnalysis, authored a thought-provoking piece on just how momentous this recent technological progress is along with his views on how AI agents will displace software and what disrupted companies can do adapt. A couple excerpts:

Assuming it improves, has harnesses, and can continue to scale large context windows and only become marginally more intelligent, I believe this is enough to really take us to the next state of AI. I cannot stress enough that Claude Code is the ChatGPT moment repeated. You must try it to understand.

One day, the successor to Claude Code will make a superhuman interface available to everyone. And if Tokens were TCP/IP, Claude Code is the first genuine website built in the age of AI. And this is going to hurt a large part of the software industry.

I believe that all software must leave information work as soon as possible. I believe that the future role of software will not have much “information processing”, i.e., analysis. Claude Code or Agent-Next will be doing the information synthesis, the GUI, and the workflow. That will be ephemeral and generated for the use at hand. Anyone should be able to access the information they want in the format they want and reference the underlying data.

What I’m trying to say is that the traditional differentiation metrics will change. Faster workflows, better UIs, and smoother integrations will all become worthless, while persistent information, a la an API, will become extremely valuable.

markets
Luke Kawa

Strategists sound alarm over silver’s rally, recommend options trades for potential violent reversal

Silver’s ridiculous romp higher in 2025 and at the start of this year is showing some signs of fraying around the edges.

And with just how fierce the move higher has been, strategists are warning of the potential for intense downside as some of the key parts of the fundamental and technical theses for silver are starting to look less solid.

Michael Purves, CEO of Tallbacken Capital Advisors, who’s been bullish on the shiny metal, thinks it’s once again time to hedge long exposure.

On Thursday, he recommended selling $95 strike calls on the iShares Silver Trust that expire in February to purchase $75 strike puts.

Purves previously recommended that clients hedge their silver exposure on December 26 (its 2025 peak) before declaring that the coast was once again clear for longs on December 30.

“It might be surprising to know that speculative long silver futures positions are at 20 month lows, or that Open Interest is at five year lows,” he wrote. “Once again, hedging long positions is in order — particularly given the distorted put-call skew which allows [investors] to sell calls to finance long put positions.”

Viresh Kanabar, an investment strategist at Macro Hive, followed this up on Friday by flagging one of several key changes in the market structure for silver. The physical market tightness, cited by bulls as an important driver behind silver’s skyward ascent, is showing signs of reversing.

“1m forwards on physical silver have flipped back to contango,” he wrote. “This lines up with physical ETF outflows and evidence that high prices are weighing on industrial demand.”

Silver contango

“In short, we are not bullish on silver at these levels, instead, see increasing signs of risks skewing to the downside,” Kanabar added.

David Cervantes, founder of Pinebrook Capital Management, told clients on Thursday that he’s taken a short position in silver by owning put options on SLV with three months to expiry, noting that its outperformance of the stock market over the past 100 and 252 days has reached unprecedented levels.

“THIS IS HIGHLY SPECULATIVE AND A SMALL GAMBLE-SIZED WAGER WILL BE MADE OVER WHICH SLEEP WILL NOT BE LOST,” he emphasized.

markets
Matt Phillips

GE Vernova rises on plan to address data center power needs

GE Vernova rose Friday as the market digested reports of Trump administration plans to effectively push hyperscalers to foot the bill for new power plants to feed the giant grid that’s home to some of country’s most data center-dense districts.

In a note, Jefferies analysts called GE Vernova — the maker of turbines for natural gas-fueled power plants — the “clearest winner” of such a plan.

(The need for additional power plants would mean more sales and/or higher prices for its products.)

Jefferies says plans for additional capacity in the PJM grid — a 13-state swath that includes areas of high data center concentration like northern Virginia and Ohio — is a negative for companies like Vistra, Constellation Energy, and Talen Energy, which had invested heavily in the the PJM grid, likely hoping elevated prices would persist. That seems less likely should plans to boost power supply in the grid actually come to pass.

Trump to push Big Tech to fund new power plants as AI drives up electricity costs

Trump to push Big Tech to fund new power plants as AI drives up electricity costs

(The need for additional power plants would mean more sales and/or higher prices for its products.)

Jefferies says plans for additional capacity in the PJM grid — a 13-state swath that includes areas of high data center concentration like northern Virginia and Ohio — is a negative for companies like Vistra, Constellation Energy, and Talen Energy, which had invested heavily in the the PJM grid, likely hoping elevated prices would persist. That seems less likely should plans to boost power supply in the grid actually come to pass.

markets
Matt Phillips

AST SpaceMobile rises on deal giving it prime position for Golden Dome project

Retail favorite and satellite-services-from-space play AST SpaceMobile jumped early Friday on news that it’s signed a deal as a “prime contract awardee” for the US Department of Defense’s Golden Dome missile defense strategy, allowing it to quickly bid on and deliver services in R&D, engineering, and operations.

The agreement, known as an indefinite-delivery/indefinite-quantity contract, effectively prequalifies ASTS as a vendor for the Trump administration’s proposed Golden Dome project.

AST SpaceMobile Gets Golden Dome Contract

AST SpaceMobile Gets Golden Dome Contract

Latest Stories

Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate, including Robinhood Markets, Inc., Robinhood Financial LLC, Robinhood Securities, LLC, Robinhood Crypto, LLC, or Robinhood Money, LLC.
©2026 Sherwood Media, LLC