Tech Slumps. These Biotechs Rip.

Two miners contrast lost conviction with continued biotech and AI research; the successful miner reaches diamonds labeled AXTI +95% and GMAB +745%.

Risk-On In The Right Places

Thursday’s tech selloff hit the crowded AI trade. Zero Hedge’s market wrap tracked broad AI stocks down about 2% and neoclouds down 5%, while small caps gained and Treasury yields fell.

Our corner of biotech had a different day. Glaukos (GKOS), which develops drugs and devices for eye diseases, jumped nearly 34% after record quarterly sales rose 58% and it raised its full-year outlook. Replimune (REPL) added another 8%, following Wednesday’s 23% rally.

The selling continued after the close: Amazon (AMZN) fell about 7% and Intel (INTC) about 23% following their earnings reports.

Wednesday’s Launch Pad

Risk appetite returned to our corner of biotech on Wednesday. Shares of Genmab (GMAB), Prime Medicine (PRME) and Replimune (REPL) each gained more than 20%. Twist Bioscience (TWST) and ClearPoint Neuro (CLPT) added about 9% apiece. Glaukos (GKOS) then jumped more than 16% after hours following earnings.

Parts of the AI stack joined the rally. Vertiv (VRT) gained about 16%, while AXT (AXTI) rose about 11%. Seagate Technology (STX) recovered from Tuesday’s post-earnings selloff.

Late Wednesday, Elon Musk weighed in on a post about biotech breakthroughs:

If you look closely enough, breakthroughs in everything are accelerating exponentially. An exponential always starts off looking small.
October 28, 2026

One analyst we follow sees a “rare convergence”: new therapeutic platforms nearing commercialization, a more receptive FDA, AI accelerating drug discovery and interest rates near a cyclical peak.

We’ve kept refining how we find ideas, choose entries, structure options and manage positions. That work, alongside our sustained focus on biotech and AI, is starting to pay off.

Taking Profits In Genmab

We’ve taken profits in Genmab (GMAB) while keeping exposure to its next advances.

We also decided to exit Monday’s AXT (AXTI) trade ahead of earnings for a $4.10 net credit—a gain of about 95% in two days.

Genmab’s positive Phase 3 results showed that petosemtamab plus pembrolizumab reduced the risk of death by 50% compared with pembrolizumab alone in the study’s first-line, PD-L1-positive advanced head and neck cancer population. Clinical readouts like this were the opportunity behind our September 10 trade:

The historical entry cards below show the ratings from Chartmill used in the original alerts.

Here’s the original entry card. We bought two February calls and sold one January call, leaving one February call with uncapped upside.

We entered this trade at a $1.50 net debit.

We bought that extra February 19, 2027 $40 call for $2.22 and sold it for $18.75—a gain of about 745% on that call.

We’re keeping the GMAB calendar open. The put spread closed Wednesday.

More Biotech Momentum

Replimune (REPL) gained about 23% Wednesday. In Wednesday’s business update, it said its melanoma treatment TUDRIQEV had reached patients and more than 15 institutions had prescribed it. Here’s our original trade:

A Clearer Path For Gene Editing

The policy backdrop is improving, too. Karim Mikhail was selected in September to lead the FDA’s Center for Biologics Evaluation and Research. On October 27th, the FDA proposed a framework for individualized gene-editing therapies that would let one approval application cover multiple patient-specific variants. Within the framework’s defined design boundaries, qualifying variants could be added using existing clinical evidence and laboratory testing, without separate trials for each one.

CMS also plans to expand its access model for cell and gene therapies beyond sickle cell disease, negotiating outcomes-based payment agreements on behalf of state Medicaid programs. That addresses the second half of commercialization: getting treatments paid for. John Evans, CEO of Beam Therapeutics, explains the FDA proposal here:

First, the FDA released new draft guidance on the BLA approval pathway for gene editing products covering gene editors for multiple variants:
October 28, 2026

Prime Medicine (PRME), our gene-editing exposure, also rallied sharply Wednesday. We entered that trade on September 25:

Where Biotech Meets AI

Twist Bioscience (TWST) participated in Wednesday’s rally too. It launched an antibody screening service designed to help researchers test thousands of candidates a day, with turnaround starting at five days. That’s the physical testing capacity AI-driven drug discovery needs. We remain bullish and are holding our October 21 trade:

AXT (AXTI), whose substrates help make the optical connections used in AI data centers, has had a strong week. We entered our latest trade Monday, ahead of today’s earnings release:

Here’s the trade we entered Monday:

We entered this trade at a $2.10 net debit.

We closed it Wednesday for a $4.10 net credit, a gain of about 95% on its original maximum risk in two days.

We exited Monday’s trade by selling to close three November 6 $57 calls and buying to close three October 30 $62 calls together for a $4.10 net credit. Here’s the exit order we used:

Exit AXTI October 26 trade: cancel the existing $0.20 GTC short-call buyback; sell to close three November 6, 2026 $57 calls and buy to close three October 30, 2026 $62 calls together as one Day order at a minimum $4.10 net credit.

Our older July 31 AXTI trade stays open.

AXT beat earnings expectations Thursday, but its shares finished after-hours trading down about 7%.

Our Next Biotech And AI Trades

We’ll keep looking for biotech and AI opportunities like these. If you’d like our original trade alerts before the market opens—and before I enter the trades myself—become a subscriber.

To see how we select, structure and manage our trades, start here:

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.