Trade Alert: Foundries And Threat Detectors
Bullish options bets on two Market Watchers names, one of which was a previous winner for us.
Foundries, Threat Detectors, And AI
One of the nice things about running a systematic process is that it keeps handing you new ideas, even when the tape looks choppy and everyone is arguing about whether “the AI trade” is over.
The flip side is that the system doesn’t care about narrative. It doesn’t know that a foundry is trying to claw its way back to process leadership, or that a little security-tech company might be a big winner from the World Cup that kicks off this summer. That’s where the human layer comes in.
Over the last few weeks, a couple of themes have stood out to me:
Second chances in semiconductors, where the fundamentals look ugly now, but the capex and roadmap argue for a very different picture as 2026 plays out.
The unglamorous side of security and AI — scanners and sensors that nobody thinks about until a major event forces governments and venues to throw money at them.
Today I’m lining up options trades on one stock in each bucket.
The Foundry Everyone Loves To Hate
If you screen large-cap chip names on trailing fundamentals — margins, returns on capital, balance-sheet quality — one well-known American giant still looks terrible compared to its peers. That’s part of what I like about it.
For years, the bear case has been simple: it fell behind on process technology, its manufacturing stumbles ceded leadership to an Asian rival, and it had to spend heavily just to stop the bleeding. It became the butt of jokes in AI circles while the usual suspects captured all of the narrative and multiple expansion.
Lately, though, the smarter semiconductor analysts I follow have been telling a more nuanced story. A few recurring points:
On advanced packaging and custom accelerators, this company has quietly been winning more business from hyperscalers—including work tied to in-house AI chips.
Its next node is positioned as a legitimate leapfrog of its main foundry competitor, at least for a window of time.
If it executes on that roadmap, it doesn’t need to “beat” the dominant player outright; it just needs to become a credible second source for leading-edge logic and advanced packaging.
None of that shows up cleanly in backward-looking ratios yet. That’s the opportunity. Right now, the stock does not screen well fundamentally, and it doesn’t get anything like the benefit of the doubt that investors are willing to give other AI-adjacent names. But if we start to see even a partial rerating over the next few quarters — beginning with January earnings, 2026 guidance, and any foundry/customer updates in the first half of the year — both earnings expectations and the multiple have room to move up from depressed levels.
Technically, it passes my “no falling knives” tests: its Chartmill setup rating is 6 out of 10, and its RSI (Relative Strength Index) is in the high 40s—the “normal” zone between oversold (under 30) and overbought (over 70).
We already have a position in this name from an earlier trade expiring in March; this trade will extend our bullish exposure out to mid-year.
Threat Detection With A World Cup Catalyst
On the other end of the spectrum is a much smaller company in a very different business: weapons detection and venue security.
If you follow the more obsessive posters in that space, a common thread lately is that investors are underestimating how much money is going to get thrown at physical security over the next few quarters, especially around high-profile events. One note that stuck with me pointed out how much upside this space could see from the 2026 World Cup and the funding that comes with it, with that tournament kicking off this summer.
The basic logic is straightforward:
Governments and stadium operators face rising pressure to harden soft targets after every incident.
Major global events concentrate that pressure in time: nobody wants the headline about a security failure at the World Cup on their watch.
Procurement and deployment happen before the tournament, not after, so the real decision window is between now and kickoff.
Once systems are installed and proven, they tend to stick around. Budgets may be lumpy, but customers don’t rip out infrastructure lightly.
The stock I’m using as a vehicle here is one of the few pure plays on that theme. It has its issues—it’s not a mature, boring cash cow—but from a price-action standpoint it looks a lot healthier than most speculative names. On my usual Chartmill “falling knives” filters, it scores:
A setup rating of 7.
An RSI in the high 50s.
In other words, it looks like something that’s been through a shakeout already and has started to rebuild a base as more investors buy into the story—with a very obvious catalyst window in front of it.
This is a name we’ve traded successfully with options before, entering a trade last June, and exiting in October for a gain of more than 200%. That was without this year’s World Cup catalyst though.
Uncapped Upside In Both Cases
For each of these names, we’re using options structures that will give us uncapped upside.
Full details on both trades, including preset exit instructions, as usual, so we won’t have to babysit them.
Today’s First Market Watchers Trade
(Semiconductors / foundry rerating theme)
