Weekly Top Ideas - 7/12/2026
Couple of names I am looking to get positioned in:
LITE (Lumentum Holdings)
On July 9, Meta Platforms disclosed plans to expand computing capacity to 14 gigawatts next year, this could further raise demand and indicates Capex spending is strong. Was a +12% day for LITE.
Silicon photonics has been a critical bottleneck and LITE is currently at the same price level since when NVIDIA’s announced a $2 billion strategic stake.
Options flow over the last 10 days is uniformly bullish, 6 bullish trades, zero bearish, with both calls being bought puts being sold.
Its been building this huge base for the past couple of months and looks like it might be starting the next leg.
Looks like a clear U&R setup here.
ANET (Arista Networks): Breaking Out on AI Switching Demand
On July 8, Arista Networks burst above its 120-session trading range, closing at $181.05 against a previous high of $177.73. No single catalyst drove the move, but it followed weeks of mounting research on AI networking.
The AI hardware theme is extending into networking. Arista’s launch of a 1.6-terabit AI switch confirmed a multi-sector repricing of data-center infrastructure. Research from late June on frontier AI labs and compute bottlenecks reinforces the need for high-speed interconnects. The connection to silicon photonics is direct: as co-packaged optics adoption accelerates, Arista’s switches become the critical junction.
Options flow is mixed, 3 bullish vs. 3 bearish screened trades. The largest bullish trade was a $3.9 million call purchase for August 2026. The price breakout itself is the strongest signal, ending a 52-session drought without a new high.
PENG (Penguin Solutions): AI Memory and Power Chain Broadening
On June 30, Penguin Solutions joined the Nvidia Partner Network as an AI Factory Specialized Partner. Then, on July 8, its earnings revealed that AI-driven businesses reached 74% of total sales, growing 104% year-over-year. The company raised full-year guidance for its integrated memory segment.
Theme context: This sits at the intersection of the AI power chain and AI infrastructure themes. The power chain theme this week broadened from passives to include memory, and Penguin’s results exemplify that shift. Industry research underscores that agentic AI software, which multiplies API calls by 10-30x, creates a direct pull for memory and observability infrastructure. Penguin’s Memory AI appliances target inference bottlenecks, and its CXL cards and data center memory modules are gaining traction.
Options flow is light but net bullish.
Might need a few more days of sideways since its up quite a bit in the last few months but top on my list to get positioned it.