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AI Is Eating The PC

Portfolio Armor's Photo
by Portfolio Armor
Friday, Oct 30, 2026 - 11:00

Memory-production workers send trays of chips toward an AI data center while a PC assembly worker waits beside unfinished computers.

Intel’s Two-Speed Business

The AI buildout is making memory suppliers richer and personal computers more expensive. Thursday’s earnings reports showed both sides of that trade.

Intel (INTC) fell about 23% in after-hours trading Thursday. Its third-quarter results showed an extraordinary split between its PC and data-center businesses:

Intel businessQ3 revenueYear-over-year change
Client Computing and Physical AI$8.1 billion−5%
Data Center and AI$7.3 billion+78%

On the earnings call, CEO Lip-Bu Tan said customers were signaling a PC slowdown because of memory prices and availability. Higher computer prices were squeezing IT budgets, and PC makers were cutting inventory as sales softened.

Intel expects industry PC unit sales to fall about 12% this year and another 10% in 2027. AI demand is also reshaping its own factories: the company plans to redirect some Oregon capacity previously intended for PC chips toward data-center production.

Samsung’s Memory Windfall

Samsung Electronics reported record memory revenue and profit Thursday. It said strong server demand had pushed memory prices higher across applications, while it steered its product mix toward AI.

Samsung is expanding sales of high-bandwidth memory used alongside AI processors, server memory and server storage. Management expects AI-driven memory demand to far exceed industry supply in 2027. The same shortage squeezing PC buyers is strengthening the suppliers’ pricing power.

That’s the investment opportunity inside this squeeze: identify which suppliers control scarce capacity, then look for evidence that customer demand is turning into higher sales and margins.

Trading The Physical Bottlenecks

Memory stores the data. Optical connections move it. We’ve also traded the suppliers behind that second part of the AI buildout.

AXT (AXTI) makes compound semiconductor wafer substrates, including indium phosphide used in optical components for data-center connectivity. That supply constraint was the theme behind our December trade. Two completed trades show how we’ve turned that research into gains.

A 347% Gain In AXT

On December 29th, 2025, we entered a three-leg combo on AXT (AXTI), an idea from our Market Watchers research. Here are the original alert’s entry terms:

Historical original entry: AXT, December 29, 2025. Three-leg combo: buy an August 21, 2026 $20 call, sell a February 20, 2026 $15 put and buy a February 20, 2026 $10 put. Maximum net debit $2.65 and maximum loss $765 at that limit. Market Watchers.

Our actual fill was $2.45, putting original maximum risk at $745 for one combination. We closed the put spread for a $0.20 debit on February 9th and sold the August $20 call for $28.50 on March 2nd. The completed trade gained about 347% on original maximum risk:

Historical three-leg combo on AXT. Entered December 29, 2025 at a $2.45 net debit. Closed the put spread February 9, 2026 at a $0.20 debit and sold the August $20 call March 2, 2026 for $28.50. Return on original maximum risk: +347.0%; return on premium paid: +1,055%. Market Watchers. Before fees.

A 95% Gain In Two Days

Our latest AXT (AXTI) trade focused on this week’s earnings catalyst. We entered a call diagonal Monday, October 26th. The original entry card includes the Chartmill ratings from that alert:

Historical original entry: AXT, October 26, 2026, Multibaggers. A call diagonal with three contracts: buy three November 6, 2026 $57 calls and sell three October 30, 2026 $62 calls, maximum net debit $2.10. Initial maximum loss $630. Maximum gain about $1,603 is Fidelity’s modeled estimate if the short calls expire in the money; upside is uncapped if the short calls expire worthless or are bought back before expiration. RSI 37; Chartmill Technical 4, Setup 4, Fundamental 4, October 23 close.

We paid a $2.10 net debit and closed the diagonal Wednesday, October 28th, for a $4.10 net credit, ahead of Thursday’s earnings. That produced a 95% gain on original maximum risk in two days:

Historical call diagonal on AXT. Entered October 26, 2026 at a $2.10 net debit. Exited the three-contract November 6 $57 / October 30 $62 call diagonal October 28, 2026 at a $4.10 net credit. +95% return on maximum risk in two calendar days. Multibaggers. Before fees.

We still hold a separate AXTI trade entered on July 31st.

The Next Supply Constraint

The next checkpoints are concrete: whether memory shortages keep squeezing PC demand, and which AI suppliers can turn capacity commitments into shipments and profit. We’ll keep looking for those suppliers, then match the options structure and holding period to the opportunity.

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

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