Morning. A few things worth watching today.
First, I still don’t see much evidence that the AI trade itself is slowing down. South Korean semiconductor exports jumped 259.4% year over year during the first 20 days of September to a record $34.1 billion. Another pretty crazy number showing how strong demand across the semiconductor supply chain still is.
The part I think is getting more interesting now is how all of this gets funded.
Goldman put out a good report last week. The idea is that the amount of money being spent on AI infrastructure is starting to eat into hyperscaler free cash flow, while companies are increasingly tapping the debt markets to keep funding the buildout. At the same time, governments are borrowing heavily too.
Goldman recently raised its forecast for U.S. investment-grade issuance this year to a record $2.3 trillion, with AI-related issuers accounting for roughly a quarter of that supply.
I don’t take that as the AI trade being over. Far from it. I think it just means money isn’t free anymore, and the market is probably going to become much more selective about which companies are actually getting a return on all of this spending.
That also makes the massive move into bonds worth watching. Roughly $625 billion has flowed into U.S. bond mutual funds and ETFs through August, the strongest January-August pace since the data began in 2010.
When investors can get around 5% in parts of fixed income, equities are competing with something they really haven’t had to compete with for most of the last decade.
Rates are still the obvious risk here. After last week’s Fed hike, futures were pricing roughly a 53% chance of another 25bp hike in October, with the probability of at least one additional hike before year-end around 90%.
The yen has also stayed surprisingly weak even after the BOJ hike, with USD/JPY around 157 and intervention back on the radar.
None of that changes my longer-term view on AI, but it does make me want to be more selective about where I put size.
Yesterday’s Flow
HUT worked very quickly yesterday, moving roughly 8% from the open. This was one of the names showing a big multiple of normal bullish activity under the Unusual Bullish Activity section of the Flow Intelligence tab.
That’s one of the things I like about that view. Instead of only looking at how much premium went into a name, it compares the activity against what is actually normal for that stock.
I have another version of this being added to the database as well, hopefully this weekend.
USAR
Posted this one in the chat yesterday:
RISK REVERSAL BULLISH - $USAR 4000 18C/14P EXP 11/20/26 Avg Fill .70
Roughly a $280K debit.
Rare earths and critical minerals are already in focus this week with U.S.-China discussions, and USAR has had a lot going on lately.
The company completed its combination with Serra Verde earlier this month, broke ground on its South Carolina rare-earth metal and magnet facility, and also announced a partnership with Pasqal and Riven Systems focused on using quantum computing and AI in critical-mineral production.
IBRX
This was probably the most interesting individual trade I saw:
CALLS BOUGHT - $IBRX 6869 11C EXP 1/15/27 Avg Fill 1.70
About $1.17M in premium.
The expiration is what caught my attention.
ImmunityBio has a January 6, 2027 PDUFA date for the supplemental ANKTIVA application seeking an expanded indication in BCG-unresponsive papillary bladder cancer.
These calls expire January 15, just nine days after the FDA date.
Obviously biotech around an FDA decision is binary, but when I see a $1M+ trade with an expiration sitting right after a known FDA catalyst, it’s worth paying attention to.
KVYO
There was also repeat buying in the same strike:
CALLS BOUGHT - $KVYO 4902 17.5C EXP 11/20/26 Avg Fill 1.12
CALLS BOUGHT - $KVYO 2047 17.5C EXP 10/16/26 Avg Fill .55
Roughly 7,000 contracts between the two expirations.
Klaviyo just held its K:BOS conference earlier this month and announced a large batch of product updates around autonomous agents, personalization models, its data platform, and eventually voice.
The November expiration is the one I find more interesting. Klaviyo hasn’t officially announced its next earnings date yet, but based on its normal schedule the report is expected in early November, meaning the November 20 calls should carry through earnings if that schedule holds.
Going to keep an eye on whether buyers come back.
CPRI
CALLS BOUGHT - $CPRI 5493 15C EXP 10/16/26 Avg Fill 1.26
Another 504 contracts at 2.00 in the same strike and expiration.
Almost 6,000 contracts total and roughly $793K in premium.
Link to the database:
https://notanotherdatabase.com/chat/i/D2xeWnWrCQ7RM2oV6rW1Hy-6