This Niche AI Data Center Stock Is On Sale  

Listen to the audio version of this article (generated by AI).

 

In This Digest: 

• This little-known AI data center company is powering ahead, even as the stock price slumps 

• Bitcoin’s top seasonal window is about to open, and it’s still in the Green Zone 

• SpaceX is spending big on the AI future – here’s how to find who’s getting paid  

Money is leaving stocks, but not for long… 

You wouldn’t know it from the S&P 500, sitting just 1.7% off its all-time high. 

But according to Lucas Downey, editor of our Quantum Edge Pro advisory, the Big Money Index tells a different story.  

This index tracks institutional buying against selling. This week, it’s down to 39, reflecting about 61% of institutional trade signals on the sell side: 

That tells us that big institutions are exiting the market as they did near the end of 2025 and during this year’s springtime Iran war panic.  

And according to Lucas, most of that selling is hitting rate-sensitive sectors – real estate, utilities, financials.  

But Lucas isn’t worried. 

Every time his Big Money Index has gone oversold since 1990, stocks have bounced: up 3.5% a month later on average, 9.5% at six months, 16% a year out.  

That means this recent stock weakness is a good opportunity to go shopping. 

And he expects two key areas of the market to lead that bounce: semiconductors and photonics.  

Most investors have gotten familiar with semiconductors in this bull market – they’re the chips that run AI in data centers. 

But fewer are aware of photonics – the optics hardware moving data through AI data centers at the speed of light. 

Lucas’s model portfolio is already touting a win based on this focus, despite the recent struggle for stocks.  

In July, he recommended Vicor (VICR) – a power-delivery hardware maker for AI chips, a close cousin to the photonics trade. It’s up 28% since. 

Here’s VICR’s current Quantum Score:  

Regular readers know the Quantum Score is our system for rating stocks based on fundamental strength with institutional money flows. 

On a scale of 0 to 100, anything above 75 is a buy. And at 94.9, VICR is one of the strongest buys you could ask for. 

But there are other opportunities in the photonics theme worth talking about, like Coherent (COHR). 

Coherent makes the lasers and optical components inside the transceivers that move data through AI data centers. It holds a Quantum Score of 81.1 – still comfortably a buy, though that number has been sliding. 

Split the score in two and you see why. The Fundamental Score reads 92.9, climbing for three straight months – the business keeps executing.  

Meanwhile, the Technical Score reads 72.7 and has been falling over that same stretch, as the stock sits roughly 31% off its highs. 

That’s a company getting fundamentally stronger… while its stock gets cheaper… in one of the top themes we track. 

Add Coherent to your watchlist here. The fundamentals are already there – a Technical Score turn back toward Green is your signal that the rest of the market has caught up. 

Bitcoin’s most reliable period of the year starts soon… 

Bitcoin doesn’t creep higher. When it moves, it tends to move fast, then go quiet for a while – which makes timing matter more with crypto than with almost anything else we cover. 

Mike Burnick – who heads up our Platinum Roundup, the weekly hub for exclusive research for subscribers who pay to receive everything we publish – has been watching the seasonal patterns in bitcoin lately. And he found a good reason to buy in. 

In all but one of the past 13 years, bitcoin has rallied during the same two-week window in October. 

TradeSmith’s Seasonality tool looks at how an asset has performed during the same calendar stretch in prior years, then flags the windows that repeat often enough to matter. Think of it like knowing a beach town fills up every Fourth of July weekend – you can consistently plan around it happening annually. 

For bitcoin, that window runs Oct. 14 to Oct. 26. It’s produced a gain in 12 of the past 13 years – a 92.3% hit rate – averaging a 6.9% move in just those two weeks. 

Bitcoin is also still sitting in the Short-Term Health Green Zone we flagged a few weeks back, holding just below its highs for the year. Regular readers know Green means the trend’s healthy and Red means it’s broken down. 

If you already own bitcoin, there’s no reason to sell here – the seasonal window argues for holding through at least the back half of October.  

If you’re looking for an entry, this period in late October has historically been the best stretch of the year to add exposure. 

Finally, a word on the AI trade nobody’s watching… 

Andy and Landon Swan – the brothers behind TradeSmith’s Earnings Season Pass advisory – have uncovered a hidden dynamic in the AI trade that few investors are even paying attention to, let alone preparing for.  

Recently they told me the story of Solaris Energy Infrastructure (SEI), a company that used to haul sand to fracking sites in West Texas.  

When it opened its books this summer, it revealed that two-thirds of its order backlog – more than 1,000 megawatts of gas turbines – was tied to a single customer: Elon Musk’s xAI.  

Revenue was up 47% year over year… and the stock took off. 

The Swans are now betting we’ll see dozens more setups just like this, all tied to SpaceX, this coming earnings season.  

SpaceX’s roughly $100 billion IPO war chest is already flowing into companies most investors have never connected to AI. Think turbine makers, cooling suppliers, concrete pourers – all the niche businesses needed to build data centers.   

Those contracts get signed behind closed doors.  

But four times a year, public companies open their books and show how they’re getting paid. 

The Swans built a system in 2013 that tracks over 500 million consumer data points a day – social media, app downloads, search traffic – to spot which companies are about to surprise Wall Street before earnings hit.  

That system has flagged nearly 1,800 earnings trades over the years. Winners and losers combined, they’ve averaged a 14.8% gain per trade, and the winning trades alone have averaged gains of just under 100% in five days or less.  

Some of their best calls come on stocks nobody’s excited about.  

Last September, their system flagged digital document signing software DocuSign (DOCU) for a reversal. The stock climbed 8% in the days that followed. Using options to amplify that move, their readers walked away with a 105.1% gain in three days. 

Andy and Landon are calling this stretch “Elon’s October Sweep,” and they’re walking through the full setup – the scoring system, real examples, what they’re watching first – in a briefing airing tomorrow, Oct. 1. 

Add your name to the list now. 

To building wealth beyond measure, 

Michael Salvatore 

Editor, TradeSmith Daily 

At the time of this writing, Michael Salvatore held bitcoin and shares of SPCX.