In a Market Chasing AI, My Money's on a Tortoise in Value Territory

I am increasingly feeling like the slow-footed character in the famous tortoise and hare story we all learned as kids. The Nasdaq sprinted forward more than 15% in April, despite the continued conflict in the Middle East that has sent energy and commodity prices soaring since the end of February.

Big first-quarter earnings beats last month sent the Philadelphia Semiconductor Index (SOXX) up nearly 45% in April. Intel (INTC) doubled during April, its best monthly performance in over a half a century. Call me old-fashioned, but I just can’t pay 23 times Intel’s projected 2030 earnings for a stock in what has historically been a cyclical industry. Intel now trades at roughly 90 times forward earnings.

Therefore, I continue to plod along — accepting less potential return by not chasing the AI narrative but taking much less risk. Value has been trumped by growth throughout the AI Revolution. The S&P 493 has almost comically lagged the Magnificent Seven since ChatGPT debuted in late 2022.

Why GE HealthCare?

Today, we tee up another value stock for a covered-call trade idea. GE HealthCare Technologies (GEHC) , was spun off from the venerable General Electric (GE) late in 2022. GE HealthCare provides advanced medical technology, pharmaceutical diagnostics, AI and software solutions to hospitals, health systems, and research institutions.

GE HealthCare has four primary business segments: Imaging, Advanced Visualization Solutions, Patient Care Solutions, and Pharmaceutical Diagnostics. The company is in the process of combining the first two divisions to lower costs and improve operational efficiency.

Imaging produces products such as MRIs and cyclotrons. This business accounts for roughly 45% of overall revenues. The segment delivered four percent revenue growth of 4% in 2025, but EBIT fell 7%. This was largely due to tariff costs.

Pharmaceutical Diagnostics is GEHC’s highest margin business. It supplies contrast media (imaging enhancers) and radiopharmaceutical imaging agents to radiology and nuclear medicine industries. Revenue grew 11% in 2025 with EBIT rising 16%. This segment contributes roughly 14% of overall revenues.

The stock has declined some 25% year to date in 2026. The main culprit was a first-quarter miss and a reduced outlook, with expenses in Q1 coming in above the consensus. This was mainly driven by higher costs for memory chips, something that also impacted Meta Platforms (META) and many key members of the technology sector.

Higher freight costs, which are another trend that will spread throughout the economy thanks to increased fuel expenses, were also a key contributor to the pullback. Freight and memory costs are now forecast to each come in approximately $100 million over previous estimates this year. Management has guided that these two costs will knock roughly 20 cents a share off of earnings in 2026. The company is expected to deliver EPS of around $4.90 in 2026.

With the recent decline, GEHC stock trades just under its spinoff price from more than three years ago. The company has a decent balance sheet and repurchased $100 million worth of its own stock in Q1.

This is not an exciting story, but GEHC now represents a reasonable value in an overbought market. The company should see profit growth in the high single digits in the coming years on sales growth of roughly 5%.

With the pullback, GEHC currently trades at 12.5 times forward earnings. The shares pay a negligible dividend but at current trading levels sport nearly a 6% free cash flow yield. The covered call strategy below is designed to either "clip a coupon" or get a lower entry point on this value stock.

Option Strategy: Clip the Coupon or Lower the Entry

Here is how one can establish a position in GEHC using a covered call strategy. As a reminder, covered-call orders involve buying an equity and simultaneously selling just out of the money call strikes against the new position.

Selecting the December $60 call strikes, fashion a covered call order with a net debit in the $53.00 to $53.60 a share range (net stock price - option premium).

This strategy delivers downside protection of 13% across the trade expiration and provides similar upside potential over the option duration.

At the time of publication, Jensen was long GEHC.