Remember that story about the jade traders in Myanmar? They’re out there buying these gray, ugly rocks that *might* contain millions in green jade—or might be completely worthless. The cruel part? You don’t know until you crack it open and pay full price.
But here’s the plot twist: what if you could drill a tiny test hole first? Sample the goods before going all-in? Suddenly, you’re not gambling—you’re investing.
That’s exactly how you should think about the AI selloff happening right now.
**The Market’s a Pile of Rocks**
We’ve been getting absolutely hammered through the first half of 2026. The tape is broken. Stocks are in freefall. But here’s the thing—buried under all this chaos are some genuinely incredible companies. We’re talking triple-digit revenue growth, expanding margins, multibillion-dollar government contracts. The fundamentals are *chef’s kiss*. The problem? The price action is a disaster.
So don’t catch the falling knife. Seriously. Don’t do it.
**The Test Hole Strategy**
Instead, drill the test hole first. Wait for the technicals to confirm a bounce, *then* buy. It’s the difference between paying full price for an uncut stone and actually knowing what you’re getting.
Let’s look at a few examples:
**Applied Optoelectronics (AAOI)** is down 47% from highs. The chart is cracked—we’ve lost the 50-day, the 100-day, even broke through the March high. It’s ugly. But the fundamentals? The company’s on track to grow revenues 125% this year to over $1 billion, then 160% next year to nearly $2.7 billion. Gross margins are marching from 30% toward 40%. EBITDA flips from a loss to $500 million-plus by 2027. At 34 times forward earnings, this is gorgeous. But wait for the bounce. That’s your test hole.
**Palantir (PLTR)** is the opposite lesson. It’s trapped under a downward-sloping 200-day moving average and keeps getting rejected. Nothing good happens below the 200. The buy zone activates when PLTR reclaims the $155-$160 area and holds. Until then? Stay out.
**Redwire (RDW)** powers the International Space Station. It has the contracts, the track record, the incumbency. We lost the $15 buy zone, but the stock is holding at $10-$11 where the moving averages converge. That’s your next opportunity.
**Cameco (CCJ)** is a uranium producer with dual optionality—it’s a major uranium play *and* owns a stake in Westinghouse, which just won a massive government contract to build new reactors. The technicals are challenged, but there’s heavy support between $90-$100. The fundamentals win here.
**The Big Picture**
Zoom out. The semiconductor complex doubled over a few months, and now we’re down about 10%. Historically, 10-15% pullbacks in the big AI infrastructure ETFs are the buy zone. We’re in that zone right now.
But here’s the golden rule: don’t fight the market. Listen to the charts. Get ready, watch for the bounce, and when the market confirms, get in the game.
The best way to lose money is to fight the tape. The best way to make money? Drill the test hole first.
