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Own the Door. Own the Pipes. Leave the Middlemen.
Who Gets Paid in AI | Part 3 of 3
By Hans Albrecht, Options With Hans
Here's a detail from the Muse rollout that most people skipped right past. Every Muse user gets their own computer. A virtual one, sitting in Meta's cloud, with its own processor, its own memory and its own browser.
And it doesn't clock out. It runs scheduled jobs while you sleep. At Connect, Meta's AI chief Alexandr Wang put it this way: "You can walk away from your computer and it keeps working for you on all the jobs you lined up." At the end of September, OpenAI launched always-on agents in ChatGPT that each get a cloud computer of their own, too.
Now imagine that at a few hundred million users. That's why I've never bought the idea that cheaper AI means less spending on AI.
In 1865, an economist named William Stanley Jevons noticed something odd. Steam engines kept getting more efficient, and Britain burned more coal, not less. Cheaper power made new uses worth it. That's AI right now. In Part 1, I showed you the same level of intelligence getting about 13x cheaper every year. That doesn't shrink the pie. It blows it up.
Cheap smarts don't shrink the pie. They blow it up.
So this is how I'm sorting the board.
Own the door. That's Meta Platforms (META), and I'll get to how I'm playing it in a second.
Own the pipes. Every one of those agent computers needs chips, memory and power, around the clock. Micron Technology (MU) just reported $54 billion in quarterly revenue, nearly five times what it did a year earlier, and guided to about $61.5 billion for next quarter. Amazon.com (AMZN) raised its 2026 spending plan to $220 billion, pointed to pricier memory, and said it still can't meet AI demand. Even Zuckerberg said on Meta's last earnings call that the company is "getting a lot of offers for compute at a significant premium over what we paid for it." When the guy spending $130 billion-plus this year is getting premium offers for his compute, that's scarcity talking. It's why memory is the drum I keep beating, and why I keep grid names like Quanta Services (PWR) close.
Don't forget the bouncers, either. When Amazon blocked Muse for not identifying itself, which I covered in Part 2, it told you who else wins. Every website now needs to know which bot is at the door and whether to let it in. That's why I keep calling Cloudflare (NET) the internet's bouncer.
Leave the middlemen. Lazy money is about to get audited. Goldman Sachs' trading desk even has a name for these businesses: "consumer inertia." Companies that make money because you stay put out of habit. Insurers, phone carriers, streaming services, travel sites. On September 22, banks, insurers and travel names all slid on Muse fears. Charles Schwab (SCHW) and Allstate (ALL) each fell more than five percent.
I named Booking Holdings (BKNG) my stock to leave on September 21. Over the next two sessions it fell about four percent, then five percent. Even Expedia Group (EXPE), which teamed up with Muse, dropped nearly eight percent the day after announcing the deal. When the agent does the shopping, nobody sees the "only 2 rooms left" banner.
How I'm playing Meta. I got bullish on Meta in the community near $625, and I took some off into the September run. I sold a piece of the move, not the thesis.
One catch. Meta is still a spender: $130 to $145 billion of capex this year, and analysts expect free cash flow to go negative. In my spenders-versus-recipients framework, I own the recipients. I trade the spenders with defined risk.
So when I add Meta, it's with LEAPS, and in this tape I want them in-the-money, the durable kind. That's mostly like stock. Out-of-the-money LEAPS are for horse-out-of-the-barn markets. In a choppy, high-vol market they get hit by wing collapse: the stock chops sideways, volatility comes in, and the calls bleed even when you're right on the story. I've also been playing Meta with income plays, cash-secured puts/cash machines/credit spreads. Vol is getting thin so I'll close this week and look for more convex approaches to taking advantage of (hopefully) less expensive upside.
Meta reports in late October, the first real look at Muse in the numbers. Yeah, I know... Hans, just buy calls into earnings. That's a coin flip with a vol crush stapled to it. I'd rather own time than a lottery ticket.
Buy scarcity, avoid abundance. You've heard me say it a hundred times. Intelligence just became the abundance. The door and the pipes underneath it are the scarcity. That's the trade.
Trade smart, stay hedged,
Hans
P.S. For readers who aren't part of the LEAPS action yet... Want to see exactly how I build these, strike by strike? That's what we do every week in LEAPS Trader: the scanner, the Trade Desk, live weekly classes and every trade alert. Tap here to see how it works.
What to put on your sticky note
Cheaper AI means more AI spending, not less. Jevons wins again.
Own the door (META) and the pipes: memory, power, and the bouncers.
Leave the middlemen that live on consumer inertia.
Own the recipients. Trade the spenders with defined risk, like in-the-money LEAPS.
This post is for educational and informational purposes only and is not investment advice or a recommendation to buy or sell any security. Options trading involves substantial risk and is not suitable for all investors. Past performance does not guarantee future results. Do your own due diligence and consult a licensed professional before making investment decisions.
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