Closelook@Hypergrowth
AI Stocks — Paid to Wait: Covered Calls Cushion the Fall
The companies that build AI fell 13.2% in a week and the ones that run it 10.5% — Kioxia −41.3%, Ibiden −37.7%, Lumentum −35.9% — while the applications and the users held. The VIX, the market's fear gauge, rose from 19.42 to 25.64, and fear makes options expensive. So the Hypergrowth book sold calls on the shares it owns and took in 32,395 dollars of premium. Across the covered lines the premium now covers a further fall of 17.1%. This diary reads the straight bull run in AI stocks as possibly over for a few months; in a market that moves sideways or lower, the premium is the return the book can still collect.
Current edition · 2026-11-08
1 · This Week's Action
The editor's read, first — the straight run may be over for a few months. This diary reads the week as the end of the straight bull period in AI stocks, possibly for a few months. It is a read, not a forecast: the build-out index fell 13.2% and the operators 10.5%, while the applications and the users held. In a market that moves sideways or lower for a while, the premium from selling calls is the return a book can still collect — and the cap that comes with it matters less. That is how the Hypergrowth book spent the week, and it is the centre of this letter.
The fear gauge did the rest. The VIX — the market's measure of how much it expects stocks to swing — rose from 19.42 to 25.64 on the week, after 28.18 on Thursday. Higher expected swings make options more expensive. The book sold calls into that and took in 32,395 dollars of premium, the subject of §6 and §8.
The selection — the applications at the top, the build-out at the bottom. The best names of the week across the AI indices: AppLovin +71.2%, Duolingo +21.9%, Airbnb +15.6%, Roblox +14.7%, Lattice Semiconductor +13.0%, NAVER +10.4%, Kakao +9.7%, Kingsoft Cloud +9.7%, Toast +9.4%, Kingdee +9.2%. The worst: Kioxia −41.3%, Ibiden −37.7%, Furukawa Electric −36.1%, Lumentum −35.9%, GlobalWafers −32.3%, Fastly −31.4%, Kokusai Electric −31.3%, Sumco −29.2%, Murata −29.1%, Marvell −28.1%.
The pattern under the names. Nine of the ten worst names make the parts and tools of the AI build-out — memory, substrates, wafers, cables, optics, chip connections — and seven of the ten trade in Tokyo or Taipei. The best names sell apps, games, travel and software to consumers and small firms. The money left the factory floor and went to the shop front. On Thursday a call for a pause on advanced AI, a Texas governor-elect wanting a data-centre moratorium and a Microsoft spending gap tied to a Texas site hit the builders together.
The medians tell it in four numbers. The builders' median member fell 13.9%, with 7 of 130 up. The operators' median fell 11.5%, 4 of 34 up. The applications' median slipped 0.2%, with 19 of 40 up. The growth index with no AI thesis rose 0.7% at the median, 52 of 100 up. A week ago the median builder rose 0.8% with 76 of 130 up.
The four indices. Capex (Rubin Build-Out) −13.2% to 1,485.88; opex (Agentic Ecosystem) −10.5% to 1,379.10; applications (Agentic Winners 40) +0.3% to 915.94; AI Users +0.7%. Thursday did most of it: the build-out index fell 10.0% that day and the operators 7.8%. Friday: +0.8%, +2.4%, −1.2%, −0.8%. The US letter reads the levels these lines broke and the ones they sit on; this letter reads the names, the flow and the book.
The software that runs AI, sold with the builders. Fastly −31.4%, Datadog −23.9%, Okta −19.0%, Zscaler −16.9%, Nebius −16.0%, CoreWeave −15.4%, Palo Alto Networks −14.2%, CrowdStrike −13.4%. The cybersecurity fund CIBR fell 9.9%, the cloud fund CLOU 7.7%, the software fund IGV 5.2%. The only operator in the top ten was Kingsoft Cloud, +9.7%.