Cisco (CSCO) and Micron (MU) are two names that 22V’s Jordi Visser continues to believe will be big winners from the AI revolution (below are his thoughts on both). I wanted to highlight some limited-risk (longer-term) option trades I like that can either be added to an existing long equity position, or as a stand-alone way to play for more upside:
CSCO option trade:
Buy CSCO Dec 67.5/80 call spread for $2.75 – $2.80 (CSCO 64.45 ref)
- Buying the Dec (6-month) upside call spread that starts less than 5% above current levels
- Targeting a breakout above the Feb ’25 highs ~ 66.50
- Favor Dec expiration for the trade as that captures next two earnings (Aug and Nov)
- 6-month implied vol remains above the 2-year highs (why I prefer the call spread to outright call purchase at this time)
MU option trade:
Buy MU Oct 125/160 call spread for $5.90 (MU 108.40 ref)
- Buying the October (4-month) upside call spread that starts 15% above current levels
- Shares now above the 200-day and holding (see John Roque’s comments below)
- Favor October expiration as that captures next two earnings (June and Sept)
- Structure offers a 5x to 1 max payout at expiration
Jordi Visser’s comments on CSCO and MU:
Trade Idea: Long Cisco (CSCO) and Micron (MU) — Core Infrastructure Picks for the AI Inference Buildout
As AI shifts from cloud-based model training to real-time inference across physical systems—robots, autonomous devices, and edge computing—the infrastructure layer is emerging as the most investable component of the AI value chain. Cisco and Micron are two critical beneficiaries of this transition. Cisco provides the low-latency networking backbone required to connect high-density GPUs and AI workloads across data centers and edge devices. It has already surpassed $1B in AI infrastructure orders YTD and reported 54% YoY growth in security revenue, with demand driven by AI-integrated network protection. Micron supplies the high-bandwidth memory (HBM) and DRAM essential for feeding AI accelerators like Nvidia’s H100 chips. All HBM capacity is sold out through 2025, and DRAM revenue from data centers tripled YoY in Q2 FY25. Industry leaders including Microsoft, Amazon, and Nvidia have confirmed inference is now the dominant AI workload, replacing training as the primary driver of compute demand. This trade thesis rests on the conviction that AI infrastructure—not just software—is entering a multi-year growth phase. Both CSCO and MU offer earnings leverage, strategic positioning, and upside potential as the AI embodiment trend accelerates.
John Roque’s technical picture for both CSCO and MU:
CSCO – Highlighted in today’s Sector Heavyweights’ chart packet. Positive technical take-aways include:
Technical Score = 4
Above upward-sloping 12-Month Mov Avg
Positive monthly momentum
BASING at top end of range in force since 2019.
Technical target = 85
MU – Technical take-aways include:
Technical Score = 2 (Neutral)
Above 12-Month Mov Avg
Positive monthly momentum
Uptrend since 2016 low is intact and the pattern of higher lows and higher highs remains consistent.
Would be good to see MU consolidate at / just above the 100 level to provide the platform for its next move higher.
