Markets
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Luke Kawa

JPMorgan recommends bullish options bet on Micron ahead of earnings

JPMorgan equity derivatives strategists led by Bram Kaplan think Micron is poised to jump after it reports earnings on Tuesday after the close — but not by too too much.

Micron has had an exceptionally hot run lately. Before Friday’s drop, shares of the memory chip specialist enjoyed a record-winning streak buoyed by a bevy of positive news on AI data center spending.

Kaplan says options that encompass the reaction to Micron’s earnings look expensive, as they currently imply a move of plus or minus 9.6% versus an average absolute change of 7.4% over the past three years. And with such an explosive advance over the past few weeks, he reckons the odds of an outsized surge on earnings are not high.

“The company’s pre-announcement should partially de-risk the earnings print, which, along with our analyst’s $185 price target (~14% upside), gives us comfort selling deep upside, leading us to favor call ratios to position into earnings,” he wrote.

JPMorgan’s recommendation:

  • Buy one call option on Micron that expires this Friday with a strike price of $170, and

  • Sell two call options on Micron that expire this Friday with a strike price of $180.

This trade doesn’t cost anything in terms of premium; you actually get paid for putting it on. The potential downside is that significant losses could result in the event the stock goes parabolic this week.

The sell side anticipates that Micron will deliver adjusted diluted earnings per share of $2.84 on sales of $11.15 billion and adjusted gross margins of 44.5% in its fiscal fourth-quarter results on Tuesday, per analysts surveyed by Bloomberg.

JPM’s semiconductor analysts think that earnings and margins will exceed expectations, and guidance for the current quarter will also surprise to the upside. Commentary around margins, supply commitments, and the balance of supply and demand for high-bandwidth memory chips next year will likely be the key factors that drive the stock amid the release of earnings and the quarterly conference call, in their view.

“Given materially higher high bandwidth memory content for XPUs/GPUs shipped in calendar year 2026 vs. calendar year 2025, and likely upside to current XPU/GPU unit growth expectations for CY26 against a backdrop of rising hyperscaler capex budgets, our analysts see little risk of oversupply next year,” Kaplan wrote.

Kaplan’s got a hot hand when it comes to trade calls on semiconductor earnings: in early September, his bullish options recommendation on Broadcom ahead of its quarterly report delivered a return in excess of 450% after the AI chip designer unveiled a major new customer later reported to be OpenAI.

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Tasha Matsumoto
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Stocks climb higher as traders buy the dip in chip stocks

While market breadth was weak, gains in semiconductors helped propel the S&P 500 and Nasdaq 100 higher.

Group of bulls being herded
markets
Helena Cheng

Nvidia and SK Hynix strike multiyear partnership on memory chips, AI data center build-out

Nvidia shares are modestly higher after it announced a multiyear partnership with SK Hynix on memory chips and building out AI data centers.

The agreement secures a long-term pipeline of memory chips for Nvidia. At the center of the partnership is the integration of SK Hynix’s high-bandwidth memory chips into Nvidia’s newly unveiled Vera central processing units. The Vera processor is Nvidia’s first stand-alone data center microprocessor designed to compete directly against traditional enterprise server lines.

The collaboration is also structured to reshape how semiconductors are manufactured. Under the terms of the agreement, SK Hynix will implement Nvidia’s CUDA-X library and PhysicsNeMo framework directly into its memory design and manufacturing workflows.

The announcement happened during a high-profile visit to Seoul by Nvidia CEO Jensen Huang, who arrived on June 5 to align with core infrastructure partners. Over the weekend, Huang met with SK Group Chairman Chey Tae-won, SK Hynix CEO Kwak Noh-Jung, and other top South Korean technology executives during a dinner meeting, according to Nvidia’s blog posts and Reuters.

Last week, SK Hynix told investors that its proposed US listing has received strong backing, which would potentially give US investors an alternative way to play the memory chip crunch.

markets
Helena Cheng

FuelCell Energy rises as AI data center pipeline overshadows Q2 miss

FuelCell Energy shares rebounded into positive territory during premarket trading, reversing an initial dip sparked by Q2 results that showed widening net losses and a year-over-year revenue decline.

Key numbers:

  • Revenue of $35.6 million (compared to analyst estimates of $40.56 million).

  • An adjusted loss per share of $1.45 (estimate: a $0.50 loss).

That revenue number marks a 5% decrease from the $37.4 million generated during the same quarter last year.

The company’s net loss expanded to $78.7 million, or $1.45 per share, compared to a loss of $38.8 million in the prior-year period. Management attributed the deeper loss primarily to a $42.6 million one-time impairment expense linked to essential equipment upgrades at its Groton Project facility.

While a 9.9% drop in total backlog initially added to the shares’ downward momentum, investors appeared to quickly pivot their attention to the company’s forward-looking metrics. FuelCell highlighted a 267% sequential jump in its sales pipeline, which has reached 4 gigawatts. The surge is driven by demand for its packaged 12.5-megawatt utility-grade power block solution tailored specifically for the booming AI data center market.

To support this high-growth data center strategy, FuelCell announced a major capacity expansion at its Torrington, Connecticut, manufacturing facility. The company plans to raise its annualized production ceiling from 350 MW to 500 MW, an infrastructure upgrade estimated to cost between $200 million and $275 million over the next 24 months.

Driven by the AI data center narrative, FuelCell Energy’s stock has risen over 130% year to date.

markets
J. Edward Moreno

Lilly says its next-gen GLP-1 shot drove 28.3% weight loss, reduced comorbidities

Eli Lilly has risen around 4% in premarket trading after reporting impressive trial results for its next-generation weight-loss drug over the weekend.

According to the results unveiled on Saturday, Lilly’s experimental weight-loss shot, retatrutide, helped patients lose 28.3% of their body weight at 80 weeks. That’s more than tirzepatide, Lilly’s weight-loss shot currently considered the most effective in the market, which helped people lose 26% of their weight over 88 weeks.

Retatrutide is a triple agonist, meaning it mimics three different hormones that promote weight loss, compared to one by Novo Nordisk’s semaglutide and two by tirzepatide. Lilly says it helps preserve more muscle mass than other weight-loss shots and also helped improve knee osteoarthritis pain and obstructive sleep apnea.

Lilly has said it would submit the drug for approval this year with the goal of getting it out to market in 2027. The jab could be the next big moneymaker for Lilly, which currently sells the most lucrative drug in the world but has had an underwhelming rollout of its oral weight-loss pill, which came to market earlier this year.

Retatrutide is already quite popular among those who experiment with peptides, or unapproved injectable drugs often sold online “for research purposes only.” For gym bros trying to attain a certain physique, a drug that has shown it can melt fat while preserving muscle is enticing.

But in a market full of knockoff drugs, will retatrutide enthusiasts pay full price for the drug when it officially goes to market?

markets
Claire Yubin Oh

Marvell and Flex rise on S&P 500 inclusion announcement

Chipmaker Marvell Technology and electronics manufacturer Flex are jumping 7% and 3%, respectively, in premarket trading on Monday after S&P Dow Jones Indices announced late on Friday that the two companies are set to join the S&P 500 benchmark index.

Replacing Pool Corp. and Campbell’s in the S&P 500, Marvell and Flex’s addition will be effective from June 22, per a press release from the provider, which assesses and updates the index on a quarterly basis.

Marvell has been one of the leading candidates for inclusion across the last few quarterly index rebalances. The company has ballooned into a $230 billion chip giant of late, thanks to the wider AI boom, investors chasing momentum, and, yes, Jensen Huang. Flex, which has been part of the S&P MidCap 400 Index since 2024, has also grown recently, having played a part in the data center boom with a portfolio that spans across infrastructure and cooling systems.

With today’s premarket movement taken into account, MRVL has now risen almost 40% in the last week alone.

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