Tech Sell-Off Sees Smart Money Cap Micron and Buy the Dip in Shopify
On Tuesday, U.S. stocks saw a clear tech sell-off, with Nasdaq sliding about 2% as risk appetite weakened sharply. With earnings season approaching and valuations still elevated, investors moved to reduce exposure to high-volatility names, setting a cautious tone across the market.
As enthusiasm around the AI narrative cooled, both semiconductors and software came under pressure. Chip stocks weakened ahead of earnings from $Advanced Micro Devices(AMD)$
Against this backdrop, $Micron Technology (MU.US)$ and Shopify both saw notable new options positioning, though the directional signals from those trades diverged.
Micron Technology shares fell more than 5% on the session, a move that appeared driven more by sector-wide de-risking and position trimming than by any fresh deterioration in company fundamentals. Expectations for HBM and high-end memory demand tied to AI servers are already well reflected in the stock, and Micron's strong prior gains made it a natural source of funds during the broader semiconductor pullback.
Options activity reinforced a clearly cautious, short-term bearish stance. Data show two identical sell-call trades in Micron options, with roughly 4,000 out-of-the-money calls expiring Feb. 27 at a $475 strike changing hands for about $5 million in total premium. The trades occurred as the stock was falling, indicating investors were not positioning for a rebound but instead harvesting elevated implied volatility while deliberately capping near-term upside. Taken together, the twin sell-call trades send a straightforward message: investors do not expect a meaningful bounce in the near term and see Micron trading with limited upside and a choppy-to-weak bias.
By contrast, Shopify's options flows point to short-term bullish positioning paired with continued medium-term caution. The stock's sharp decline was driven largely by a valuation and narrative reset. As AI tools lower the barriers to building, operating, and transacting online, investors are reassessing the pricing power of platform software in an agentic-commerce environment, and Shopify's selloff reflected that recalibration.
In the near term, data show institutions sold roughly 5,000 Shopify put contracts expiring Feb. 13 with a $125 strike, as implied volatility briefly surged toward 95%. Coming after a steep drop in the shares, the heavy put selling suggests investors see near-term downside as largely priced in, with limited scope for further sharp declines around earnings and an increased likelihood of stabilization or a technical rebound. At the same time, caution persists further out. Put options expiring May 15 with a $100 strike continued to attract buying, indicating that investors are still paying for protection against a post-earnings valuation reset, should markets take a harder look at Shopify's growth trajectory, AI returns on investment, and overall valuation framework.
Taken together, the options market is delivering a consistent message across both names: as AI enthusiasm cools and earnings uncertainty looms, investors are leaning defensive rather than aggressively bullish. Micron's options structure points to outright short-term bearishness or, at minimum, a firm cap on rebounds, while Shopify reflects reduced near-term pessimism but continued caution over the medium term.
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