Paying More For Stronger Evidence
Yesterday, we tried to enter a short-dated earnings trade on one of the original AI bottleneck stocks. Our order didn’t fill. Then the company’s earnings beat expectations, strengthened the bottleneck thesis, and the stock traded more than 20% higher overnight.
The shares cost more today. The company is worth more, too. The earnings uncertainty has passed, and a newly announced long-term supply agreement adds commercial weight to a story that had already produced two winning trades for us.
The technical picture has changed as well. Before the report, ChartMill gave the stock a Technical Rating of 4, a Setup Rating of 3, and an RSI of about 42. Those readings captured the selloff before the gap. Fidelity’s live data after the report put its RSI near 52, with the shares above their 50-day exponential moving average.
Today’s structure reflects that stronger evidence. Instead of another short-dated binary, we’re using a defined-risk trade that reaches into early 2027 and spans two more earnings cycles.
A Second Bottleneck Reentry
Our second trade brings us back to a former winner in the silicon-photonics stack. Its Swedish shares have started rebounding, but the OTC limit price in the trade below is still more than 10% under the lowest price at which we exited our previous position. The stock remains below its 50-day EMA, so this is a deliberate exception to our usual screen discipline.
The U.S. government’s investment in GlobalFoundries (GFS 0.00%↑) adds useful context. Washington has committed about $1.5 billion in CHIPS funding to expand its domestic capacity, and GlobalFoundries has selected the supplier behind today’s second trade for its silicon-photonics platform. That ties the idea directly to a funded manufacturing ecosystem.
Both ideas came from our Multibaggers list. As regular readers know, that’s a subset of our Market Watchers X list populated by accounts with recent, 100%+ winners.
Full details below.
Today’s First Multibaggers Trade
AI optical-interconnect / indium-phosphide bottleneck theme
RSI: 42; Chartmill Technical Rating: 4; Setup Rating: 3; Fundamental Rating: 2.
Note: This Chartmill data doesn’t incorporate Thursday’s blowout earnings report or the stock’s post-earnings move.
The stock is AXT, Inc. (AXTI 0.00%↑), and our trade is a hybrid combo consisting of these four legs:
Buying the February 19th, 2027 $100 call,
Selling the January 15th, 2027 $110 call,
Selling the February 19th, 2027 $45 put,
Buying the February 19th, 2027 $40 put,
At a max net debit of $1.50.
The max gain on 1 contract is about $2,300 if the short January call expires in-the-money (uncapped if it expires out-of-the-money or is bought-to-close before then), and the max loss is $650.
This trade hasn’t filled yet. This trade filled at $0.80.
Today’s Second Multibaggers Trade
Silicon photonics / external-laser bottleneck theme
Sivers Semiconductors AB (SIVEF) and our trade is buying SIVEF shares at or below $3.45 per share..
This trade hasn’t filled yet. This trade filled at $3.20.
Unless otherwise indicated, all trades are day orders and will be canceled at the end of the day if they don’t fill.
Exiting These Trades
My plan:
AXTI
Calls/Calendar: Enter a GTC order to buy-to-close the January 15th, 2027 $110 call at $0.20. If it remains in-the-money as January expiration approaches, cancel that order and exit the call calendar at a net credit slightly above the midpoint, lowering the credit as necessary. If the short call expires out-of-the-money or is bought-to-close first, I’ll post a sell target for the February 19th, 2027 $100 call in the comments and via chat/email no later than 30 days before expiration.
Put Spread: Enter a GTC order to exit the February 19th, 2027 $45–$40 put spread at a $0.20 net debit, raising the debit if necessary as expiration approaches.
SIVEF
Shares: Enter a GTC order to sell half of the shares at $10.35. If that fills, I’ll share a runner target for the remaining shares in the comments and via chat/email.