RXRX Soars 11.6% on AI-Driven Breakthrough: Can This Momentum Sustain?

Summary
• Recursion Pharmaceuticals (RXRX) surges 11.6% in pre-market trading, breaking above $6.50 for the first time since February 2025.
• Strategic acquisition of REV102 for hypophosphatasia and AI-generated MALT1 inhibitor REC-3565 dominate investor sentiment.
• Options market frenzy: $6.5 strike call options see 65% price jump as volatility spikes to 118%.
• With a 18.2% turnover rate and $60 million in volume, RXRX’s volatility has outpaced its biotech peers by 300 basis points. This surge reflects both fundamental progress and speculative fervor, as the market digests a rare convergence of AI-driven drug development and rare disease commercialization potential.

AI-Generated Molecules and Rare Disease Acquisition Ignite Bullish Sentiment
RXRX’s 11.6% rally stems from dual catalysts: the acquisition of REV102 for hypophosphatasia and renewed focus on its AI-designed MALT1 inhibitor REC-3565. The $25 million deal with Rallybio secures rights to an oral therapy for a severe rare disease, while Peter Ray’s WIRED interview highlighted the AI platform’s role in creating REC-3565, which bypasses traditional drug design. This dual narrative—AI efficiency and unmet medical need—has attracted both institutional buyers (UBS added 4.1M shares) and retail traders, evidenced by the 14% social media-driven rally over the past month. The stock’s 18.2% turnover rate suggests a shift in investor sentiment from skepticism to conviction.

ETFs and Options Playbook: Navigating RXRX’s Volatility with Precision
• 200-day average: 6.24 (just crossed); RSI: 66.3 (neutral-to-bullish); MACD: 0.157 (bullish divergence); Bollinger Bands: 4.76–5.78 (price at 6.52, above upper band)
• ARK Genomic Revolution ETF (ARKG) and ROBT show 2.07% and 0.91% gains, respectively, aligning with RXRX’s AI-driven thesis.
• Key levels: Support at $5.20 (30D MA), resistance at $6.17 (200D MA). A break above $7.15 (intraday high) could trigger a test of the 52W high at $12.36.
• Top Option 1: RXRX20250725C6.5
• Code: RXRX20250725C6.5
• Type: Call
• Strike: $6.5
• Expiry: 2025-07-25
• IV: 118.26% (high volatility)
• Delta: 0.520 (moderate sensitivity)
• Theta: -0.0626 (rapid time decay)
• Gamma: 0.444 (high sensitivity to price movement)
• Turnover: $422,665 (high liquidity)
• Payoff at 5% upside (6.848): $0.348 per share. This call benefits from both the current momentum and the high gamma, making it ideal for a short-term rally.
• Top Option 2: RXRX20250801C6.5
• Code: RXRX20250801C6.5
• Type: Call
• Strike: $6.5
• Expiry: 2025-08-01
• IV: 107.87% (moderate volatility)
• Delta: 0.536 (moderate sensitivity)
• Theta: -0.0320 (slower decay)
• Gamma: 0.314 (sensitivity to movement)
• Turnover: $108,118 (strong liquidity)
• Payoff at 5% upside: $0.348. This contract offers a longer time horizon, balancing IV and time decay for a measured rally.
• Actionable Insight: Aggressive bulls should prioritize RXRX20250725C6.5 for immediate upside capture, while RXRX20250801C6.5 provides a more conservative entry. Watch for a $7.15 breakout to validate bullish sentiment.

Backtest Recursion Stock Performance
The backtest of RXRX's performance after an intraday surge of 12% shows mixed results. While the 3-day win rate is 49.12%, indicating a slightly positive short-term performance, the 10-day win rate is lower at 47.55% and the 30-day win rate is the same at 49.12%. The maximum return during the backtest period was 1.48%, which occurred on day 45, suggesting that while there is potential for gains, they are not consistently high.

RXRX’s AI-Driven Bull Case: Now Is the Time to Act
RXRX’s surge reflects a rare convergence of AI innovation and rare disease commercialization. With a 118% implied volatility and a 18.2% turnover rate, the market is pricing in both near-term catalysts and long-term potential. The 52W high at $12.36 remains a distant target, but the $7.15 intraday high is a critical short-term threshold. Investors should monitor the sector leader Amgen (AMGN), which rose 0.37% today, as a barometer for biotech risk appetite. For those with conviction, the RXRX20250725C6.5 call offers a high-gamma, high-liquidity play on a 5% upside. The key takeaway: Position now before the AI-driven narrative gains broader institutional traction.