PEP Options Signal $170 Bullish Bet: How to Play the AI-Driven Earnings Catalyst

• PEP trades at $145.54, up 1.44% with volume surging to 3.87M
• Call open interest dominates at $170 and $160 strikes for Friday expiry
• AI partnership and Q4 earnings on Feb 3 fuel near-term optimism

Here’s the takeaway: PEP’s options market is screaming upside potential with heavy call buying at $170 and $160 strikes. Technicals and news align for a bullish setup—let’s break it down.

Bullish Imbalance in Options: Why $170 Matters

Options traders are piling into out-of-the-money calls like PEP20260116C170 (OI: 54,829) and PEP20260116C160 (OI: 36,325), which expire this Friday. These strikes suggest a strong belief that PEP could rally 14%+ in just two days. The put/call ratio of 0.56 (calls > puts) reinforces this bias. But don’t ignore the $135 put (OI: 19,709)—some are hedging against a drop below Bollinger Bands’ $135.81 lower bound. The risk? If PEP fails to hold above $143.14 (intraday low), the bullish narrative cracks.

Block trading shows no whale moves today, so this is retail and institutional options positioning driving the story. The $170 call, while expensive, reflects big money’s conviction in the AI partnership’s near-term impact.

AI & Earnings: Fuel for the Fire

PepsiCo’s collaboration with Siemens and NVIDIA isn’t just buzz—it’s a productivity play. Analysts are already pricing in Citi’s $170 target, which lines up with the heavy call buying at that level. The Q4 earnings report on Feb 3 adds another catalyst: if the Foods division shows sequential improvement, the stock could gap higher. But here’s the catch—margin pressures in PFNA could temper gains. Investors are betting the AI-driven efficiency wins will offset those risks, and options data shows they’re willing to pay a premium for that bet.

Actionable Trades: Calls, Stock, and Timing

For options:

• Aggressive Play: Buy PEP20260116C160 (strike $160, expiring Friday). If PEP breaks above today’s high of $146.29, this call could see 20%+ gains.
• Cheaper Alternative: PEP20260123C146 (strike $146, next Friday expiry). It’s a lower-cost way to play a post-earnings pop.

For stock:

• Entry: Consider buying PEP near $143.54 (30D support level) if it holds above today’s low of $143.14.
• Target: Aim for $146.29 (intraday high) first, then $150 (Bollinger Band middle at $144.08 + 6% buffer).
• Stop-Loss: Below $143.14 invalidates the bullish case.

Volatility on the Horizon

This is a high-conviction trade. The AI partnership and earnings report create a "double-barrel" catalyst. But don’t ignore the RSI at 39.88—PEP isn’t in overbought territory yet. If the stock holds above its 200D MA ($141.58), the bullish case strengthens. Watch the $146.29 level like a hawk: a break above it could trigger a rush to the $170 calls, turning a 14% dream into a reality.

Bottom line: PEP’s options market is pricing in a big move. The question isn’t if it’ll happen—it’s when. And with earnings and AI news on deck, the window is narrowing.