Partying Like It's Still Not 1999
Partying Like It’s Still Not 1999
Last month, we published a post called “Partying Like It’s Not 1999,” pushing back on the lazy comparison between the current AI boom and the end of the dot-com bubble.
⚡️ Partying Like It's Not 1999 ⚡️
— Portfolio Armor (@PortfolioArmor) May 17, 2026
This isn't the Dot-Com bubble. https://t.co/U5GYYivjQJ
The short version: yes, AI stocks have run hard. Yes, some trades are crowded. Yes, there will be pullbacks. But the better AI-infrastructure names are not dot-com vaporware. They’re selling real products into real demand, with revenues and earnings moving sharply higher alongside their share prices.
Micron’s (MU 0.00%↑) earnings report after the close Wednesday strengthened that point.
Micron has been one of the market’s rocket ships over the last year, but the stock hasn’t gone up in a vacuum. Its fiscal Q3 revenue climbed to $41.46 billion, up sharply from $23.86 billion the prior quarter and $9.30 billion a year earlier. That’s roughly as much quarterly revenue as Procter & Gamble, Coca-Cola, and McDonald’s combined.
Skeptics will say memory is still a commodity business, commodity businesses are cyclical, and the cure for high prices is high prices.
All of that may be true. The salient questions are where we are in this cycle, and how long this cycle might last.
On that front, Micron’s commentary was striking: management said it expects tight supply conditions to persist beyond calendar 2027 and that, even as industry supply improves gradually in 2028, it still has “no line of sight” as to when memory supply will catch up with demand.
The Goldilocks Zone
That doesn’t mean we want to chase Micron right here.
We’ve traded Micron profitably earlier this year,
4-leg combo on Micron Technology (MU 14.83%↑). Entered at a net debit of $2.62 on 3/3/2026; exited the put spread at a net debit of $0.20 on 4/8/2026; exited the call spread at a net credit of $16.00 on 5/5/2026. Profit: 504% (return on max risk: 173%). Signal: PA Top Names.
But after this kind of post-earnings move (the stock was up ~18% in the premarket when we wrote this), we’d rather look for less obvious ways to express the same broader theme.
That brings us to today’s alert.
We’re entering two AI-related trades on names that sit in what we think of as our technical Goldilocks zone: not overextended, but still in an uptrend.
One is tied to AI data-center power and cooling infrastructure. The other is tied to AI compute infrastructure, high-performance computing, and memory systems. Both are ways to express the AI buildout without buying the most obvious winner after another blowout report.
We’re also adding a space/defense communications trade.
The SpaceX IPO has pulled attention and capital toward the new sector leader, while many other public space names have sold off. We’re taking advantage of that pullback to add a trade on a lesser-known space name that is also in our Goldilocks zone.
Harvesting Volatility
The common thread across today’s trades is not just the themes. It’s the structure.
These are volatile names, and volatility makes options expensive. Rather than simply buying calls, we’re using multi-leg options structures to harvest some of that volatility and lower the cost of bullish exposure.
For example, in one of today’s trades, the call we want was trading for more than $13 per contract yesterday. Instead of simply buying that call, we built a structure around that should lower our cost to $1.60.
That structure gives us bullish exposure to the same underlying move while using other options in the chain to reduce the entry cost dramatically. If the stock moves the way we want, the potential upside is meaningfully larger than the amount at risk. If it goes sideways or down, our loss is capped at a fraction of what we would have paid to simply buy the call outright.
In another one of today’s trades, we’re looking to get paid to enter.
That’s the tradeoff we want: bullish exposure to strong themes, lower entry costs than simply buying calls, and asymmetric upside potential relative to risk.
If you'd like a heads up when we place those trades later today, you can subscribe to our trading Substack/occasional email list below.