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Reject The FUD

Portfolio Armor's Photo
by Portfolio Armor
Thursday, Jun 11, 2026 - 8:46

An anthropomorphic bull resisting an anthropomorphic bear's FUD.

The FUD Trade

Markets have been hit with another wave of Fear, Uncertainty, and Doubt since Friday.

Some of it is the usual “AI bubble” talk. The comparison being pushed again is that this is 1999, and the recent weakness is the start of a Dot-Com-style collapse.

We addressed that argument directly a couple of weeks ago in Still Comparing This To The Dot-Com?.

The short version is that the earnings, cash flows, and valuations of the leading AI companies today don’t look much like the profitless dot-com names that defined the late 1990s.

The AI buildout is already showing up in real revenue across semiconductors, memory, servers, optics, networking, power, cooling, and data-center infrastructure.

Still Not 1999

The stronger analogy is not “the bubble is popping.”

It is that markets are starting to sort the winners from the pretenders.

That’s what markets do during real technology transitions. They get overexcited in places, underprice other pieces of the chain, and periodically mark everything down when the story gets too crowded.

The job is not to pretend every AI-adjacent name deserves a premium multiple. The job is to separate real earnings power, real bottlenecks, and real option value from the stories that only worked because the tape was strong.

IPOs Aren’t The Top

Another version of the FUD says the coming IPOs of SpaceX, Anthropic, and later OpenAI will suck the air out of the rest of the market.

That sounds plausible at first, but the Dot-Com analogy breaks down there too.

Some of the most iconic Internet IPOs of that era happened years before the market top: Netscape in 1995, Amazon in 1997, and eBay in 1998. As Eliant Capital noted on X, those listings didn’t mark the end of the bull market.

They were part of the process by which the market started separating durable companies from promotional stories.

The IPO wave will matter. It will test demand. It will reprice some private-market assumptions. It will give public investors a chance to compare AI leaders directly instead of valuing them through second- and third-derivative plays.

But treating those IPOs as an automatic liquidity vacuum assumes the conclusion.

The better historical lesson is that important IPOs can broaden a bull market before they eventually help discipline it.

The AI Roadmap Fight

Then there is the AI-infrastructure-specific FUD.

A summary of a SemiAnalysis report this week suggested that NVIDIA’s 800V DC architecture and co-packaged optics timelines may be pushed out, with 800V DC large-scale shipments slipping toward 2028 and broader CPO mass production delayed into 2028–2029.

That hit a number of AI-infrastructure names.

It’s a serious claim, but it isn’t the only data point.

The Companies Say Otherwise

NVIDIA has publicly positioned co-packaged optics as central to its AI networking roadmap. Its Spectrum-X Photonics release said Quantum-X Photonics InfiniBand switches were expected later that year, with Spectrum-X Photonics Ethernet switches coming in 2026. NVIDIA’s own silicon photonics page says Spectrum-X Ethernet Photonics is available in the second half of 2026.

Lumentum has also pointed to optical timelines that don’t match the most bearish interpretation. A conference transcript summary described optical scale-up products shipping in the second half of 2027, with a larger ramp after that.

Coherent has been pointing in the same direction. Its OFC 2026 investor presentation highlights VCSEL arrays as ideal for NPO/CPO transceivers for scale-up, with ongoing hyperscaler engagements.

That doesn’t settle the debate. Roadmaps can shift. Yields can disappoint. Bridge technologies can last longer than expected.

But when one report causes a forced selloff in names where the companies themselves are still pointing to earlier AI-infrastructure and optical-networking timelines, it’s not a reason to panic. It’s a reason to compare the report against the primary-source evidence.

Incentives Matter

Markets aren’t populated by disinterested monks.

Plenty of institutions missed parts of the AI-infrastructure rally, and some of them would welcome better entry points. That doesn’t prove any specific bearish report is wrong, and it doesn’t require assuming bad faith. It just means we should separate the claim from the market reaction.

Temporary bridge technologies can matter for a while. Roadmaps can shift. But when the market treats any uncertainty as proof that the whole AI-infrastructure thesis is breaking, it creates exactly the kind of volatility we can sometimes use.

Hormuz: The Question Now

Yes — that’s stronger. Reuters says Trump disclosed that he directed a secret U.S. military mission to support oil tankers and commercial ships through Hormuz, with more than 100 million barrels of oil moving through the strait. (Reuters)

Here’s the revised section:

Hormuz: The Question Now

Finally, there is the Strait of Hormuz.

That risk is real. Iran has already disrupted the Strait. The question now is whether that disruption is starting to be lifted, and whether the worst-case version of the story is losing force.

The U.S. has now launched another round of strikes on Iran. Iran did retaliate, claiming attacks on U.S. targets in the Gulf region. But so far, its response looks more like a limited retaliation than a successful escalation.

Iran can still fire missiles and drones. It can still issue threats. It can still create headline risk. But the relevant market question is whether Iran can actually keep the Strait closed, stop U.S.-protected shipping, or impose a sustained energy shock on the world economy.

So far, the answer appears to be: not really.

U.S. Central Command denied that the Strait was closed, and said commercial ships were still transiting it despite Iran’s threats. The U.S. military also denied Iranian reports that U.S. warships had been struck in the Strait.

That’s consistent with President Trump’s disclosure yesterday that he directed the U.S. military to execute a secret mission supporting oil tankers and other commercial ships through the Strait of Hormuz, allowing more than 100 million barrels of oil to reach the market.

The situation is still dangerous, but the market doesn’t trade on danger in the abstract. It trades on whether the worst-case scenario is getting more or less likely.

Right now, the worst-case “Strait closed indefinitely” scenario looks less likely than it did a few days ago. Iran is still threatening. The U.S. is still striking. But ships are reportedly moving, Iran’s retaliation has not produced a decisive military result, and the energy shock may be starting to lose force.

That matters for inflation too.

This week’s CPI report was hot because energy was hot, and energy was hot in part because the Strait of Hormuz disruption helped push oil and gasoline prices higher. If that disruption is now being gradually lifted, it should put downward pressure on the energy component of future CPI reports.

Markets don’t need perfect news to stabilize after a FUD-driven selloff. They just need the worst-case version to stop getting worse.

Back To Process

That’s the backdrop.

We’re not trying to call a bottom in every stock that sold off. We’re looking for names that pass our technical screens and have option chains where volatility gives us attractive defined-risk structures.

The goal is to avoid falling knives while still being willing to act when fear improves the risk/reward.

Volatility Is A Tool

The key point is that volatility is not just something to fear.

When options are priced attractively, volatility can help finance upside while defining the downside. Instead of simply buying common shares into a selloff, we can sometimes use option combinations that harvest put premium, cap or define worst-case risk, and keep meaningful exposure to a rebound.

That structure matters most during periods like this.

When the market is calm, investors tend to chase clean stories at rich prices. When the market is panicking, investors can sometimes get paid to take the other side of fear—but only if the risk is defined and the setup is still intact.

What We’re Looking At Today

Today, we’re looking at trades tied to four themes:

  • AI / data-center / humanoid-robotics sensing,
  • AI networking infrastructure,
  • distributed power / data-center power / military power,
  • advanced materials / defense / semiconductor-adjacent small-cap upside.

Those are very different themes, which is part of the point.

It is a process: find strong or improving setups, look for volatility we can use, define the downside, and make sure the potential upside justifies the risk.

If you want a heads up when we place our next trades, you can subscribe to our trading Substack/occasional email list below.

And if you're scared, we're there for you too. 

Contributor posts published on Zero Hedge do not necessarily represent the views and opinions of Zero Hedge, and are not selected, edited or screened by Zero Hedge editors.
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