Julia Letlow of LA05 makes significant stock transactions in Merrill Lynch account

Rep. Julia Letlow executed multiple equity trades in February 2026 in her Merrill Lynch account, with each transaction sized between $1,001 and $15,000. She sold shares in 3M, AT&T, Broadcom, Humana, BXP, Expand Energy, HF Sinclair and ICON, and purchased stakes in AMD, Apple, Boeing, Cisco, Cummins, Extra Space Storage, IBM, Leonardo DRS, Meta, PepsiCo, P&G, Regeneron, TSMC, Travelers and Vistra. The article also notes oil is on a two-week winning streak amid Iran supply concerns, but the disclosed trades are modest in dollar size and unlikely to move markets materially.

Analysis

A geopolitical-driven energy risk premium is propagating through both commodity markets and real-money positioning, creating asymmetric outcomes: cyclical energy names and small-cap producers see headline volatility while AI compute and high-efficiency server OEMs capture durable order flow. Higher fuel and diesel replacement costs create a non-linear margin hit for legacy refineries and merchant power generators over the next 1–3 quarters, which favors firms with scale or contractual pass-throughs (insurance and large regulated utilities) while exposing smaller OTC E&P/refining names to liquidity squeezes.

On the technology side, capacity-constrained foundries and vertically integrated OEMs are the natural second-order winners: tighter energy markets raise the value of efficiency-per-watt and predictable supply chains, advantaging foundry-share gainers and OEMs that can convert orders quickly. That amplifies upside for nodes/tier-1 suppliers over a 6–18 month AI capex cycle while making speculative, inventory-laden suppliers more binary — large upside if bookings accelerate, steep downside if orders slip.

Risk pathways are clear and fast: a diplomatic de-escalation or strategic SPR release can collapse the energy premium within days–weeks, quickly reversing commodity-driven weakness in small energy names. For tech, the biggest reversal risk is a demand re-steer (enterprise pause or large cloud Tier-1 pullback) within 3–6 months that turns current momentum into excess inventory and warranty/price pressure.

Net positioning implication: lean into differentiated, capital-efficient AI/compute exposure with explicit hedges against a short-lived energy shock. Avoid one-way exposure to small OTC energy names and use options to express directional views while capping downside during the near-term political event window (0–90 days).

Key Decisions for Investors

• Long SMCI (or buy 3–6 month LEAP call spread): buy SMCI Jul/Dec 2026 call spread (buy 1 ATM, sell 1.5x OTM) sized to 1–2% of portfolio. R/R: target 40–80% upside if AI server bookings continue, max loss = premium (~100%). Entry: on <10% pullback or now with defined-cost spread. Timeframe: 3–12 months.
• Pair trade — long TSM + AMD vs short small-cap energy (EXEEZ, DINO): allocate 1.5% long TSM/AMD and 0.75% short EXEEZ+DINO. Rationale: capture secular fab demand while short names have liquidity/credit vulnerability if commodity volatility re-prices. Timeframe: 3–9 months. Risk: oil spike >20% would hurt the shorts; size accordingly and set a 20% adverse move stop.
• Income/defensive overlay on TRV/IBM: sell 6–9 month covered calls (1–2% of book) to harvest volatility premium while keeping upside exposure — goal 6–12% annualized yield plus participation to +15–25% upside. Use strikes ~10% OTM. Timeframe: 3–9 months. Risk: forced assignment on large gap moves.
• Directional Meta (APP) call spread: buy 9–12 month call spread to capture sustained ad-recovery/AI monetization (buy ATM, sell 1.3x OTM) sized modestly (0.5–1% of portfolio). R/R: 2:1 upside vs premium with capped downside. Entry: ladder into any 5–12% pullbacks; monitor ad-revenue prints quarterly for roll decisions.