Thanks to the rise of artificial intelligence and other groundbreaking technologies, semiconductor stocks are all the rage these days. At the same time, there’s something to be said about chasing the same ideas that everyone else is following. While riskier, traveling the less-beaten path may lead to more favorable outcomes — and that just might be the case with tech specialist Rambus (RMBS).

Focused on high-speed memory interface chips, Rambus also operates in the realm of chip-to-chip interconnect and security, along with silicon intellectual property. The company’s mainline specialty is in DDR5 memory modules, secure cryptography and high-bandwidth data solutions used across data centers, client devices, automotive and government sectors. As a pioneer in DDR memory interfaces, Rambus owns thousands of patents around memory and interconnect technologies.

Fundamentally, the semiconductor firm commands a leading presence in DDR5 register-clock driver (RCD), power management IC (PMIC) and memory buffer chips. Major tech companies like Micron Technology (MU) and Intel (INTC) utilize these components for server and PC memory platforms. As such, RMBS stock plays an indirect but critical role in the AI and big data boom.

On another note, Rambus generates significant revenue through the licensing of its patents. Specifically, this IP is embedded into critical infrastructural networks, such as memory interfaces, security protocols and high-speed interconnects. Put another way, Rambus’ patents are foundational, tying into how memory systems function and are thus difficult to design around without incurring infringements.

While RMBS stock isn’t immune to competitive and fundamental pressure points, it effectively owns an IP moat. This alone helps it to buffer the threat of “commoditized” semiconductors, which must always outperform and out-innovate competing products on a frequently cyclical basis.

No, RMBS stock isn’t sexy — but for many investors, that’s part of the charm.

Leveraging Market Breadth Data for RMBS Stock

Earlier this month, Barchart content partner Zacks Investment Research noted that RMBS stock represented a compelling investment idea thanks to its strong momentum characteristics. As of May 9, the security had gained 11.6% over the past month. In contrast, the benchmark S&P 500 gained 6.9%.

Encouragingly, RMBS stock continues to make good on this kinetic signal. In the trailing month, the equity is up an impressive 24%. On the other end, the S&P 500 returned a tick over 13%. What’s more, those who believe in the power of quantitative methodologies may see potential profitability over the horizon.

Currently, in terms of market breadth, RMBS stock is riding a “6-4-U” sequence: six up weeks, four down weeks, with a net positive trajectory across the 10-week period. The significance of the 6-4-U is that in 60.61% of cases, the following week’s price action results in upside, with a median return of 2.58%.

Based on the most recent closing price, RMBS stock could possibly see a quick lift to $56. Over the next several weeks, the bulls — if they end up controlling the market — will likely drive the price toward the $58 to $60 range.

Statistically, what’s appealing about the above projection is that, as a baseline, RMBS stock enjoys an upward bias. The chance that, on any given week, a long position will be profitable is 55.86%. So, traders are already incentivized to place a debit-based wager on Rambus.

However, the appearance of the 6-4-U market breadth sequence amplifies this incentivization. By recognizing this quantitative signal, bullish traders receive 4.75 percentage points of favorable odds for free. That’s a small but quantifiable edge that you can advantage with options.

Playing the Rambus Game Smartly

For next week, RMBS traders essentially have a 60/40 wager on their hands. If we assume that the bulls maintain control of this sentiment regime, an upside target of $57.50 over the next month is arguably quite reasonable. Subsequently, daring speculators may consider the 55/57.50 bull call spread expiring June 20.

The above transaction involves buying the $55 call and simultaneously selling the $57.50 call, for a net debit paid of $135. Should RMBS stock rise through the short strike price at expiration, the maximum reward stands at $115, a payout of over 85%.

Strategically, this trade makes sense as RMBS natively wants to rise, irrespective of context. But with the appearance of the aforementioned market breadth pattern, the bulls are empirically more receptive to pushing Rambus higher. You can use this market intelligence to your advantage and scalp a robust payout over the next month.