Trade Alert: Data Storage and Power Electronics
Bullish options bets on two of our current top names that fit our core themes.
A Top Names Performance Update
As regular readers may recall, since we started this Substack in December of 2022, Portfolio Armor’s Top Names have more than doubled the performance of the SPDR S&P 500 Trust ETF ( SPY 0.00%↑ ) over the next six months: +20.24% versus +10.05% for SPY across 142 rolling 6-month periods.
Avoiding Falling Knives
Today’s two trades come from last night’s Top Names list, but they also pass the tighter entry requirements we’ve been using to avoid falling knives: Relative Strength Index within a reasonable range (generally, in the 40s and 50s) and ChartMill’s Setup rating. In other words, these aren’t just names our system likes over the next six months; they’re also names that look timely from an entry perspective.
Two Top Names That Fit Our Core Themes
Both fit squarely within our core themes as well. One is tied to power electronics and the infrastructure needed to support AI and advanced computing. The other is tied to AI-driven demand for high-capacity data storage. And in both cases, the bullish legs of our trades go out to next fall, by which time we expect the current war to have been resolved.
Power Electronics For AI
The first company makes highly engineered power-conversion products used in data centers, industrial equipment, and other demanding applications. As AI workloads expand, the need for efficient power delivery and control becomes more important, and that gives this name a natural place within our AI infrastructure theme.
We’re using a defined-risk options structure here that lets us participate in upside over the next several months while limiting our downside if the stock moves against us.
Data Storage As An AI Bottleneck
The second company is a direct beneficiary of growing demand for data storage tied to AI. As model sizes increase and enterprise AI deployment expands, storage remains one of the bottlenecks in the broader buildout. That makes this another way to express the AI infrastructure theme without simply buying the most obvious names in the trade.
Here too, we’re using a defined-risk options structure that gives us meaningful upside if the stock moves the way we expect over the next few months, while capping our downside if it doesn’t.
Full details on both trades below, including our preset exit orders, as usual, so we can harvest profits automatically if these trades go our way.
Today’s First Top Names Trade
AI power infrastructure theme
