Best Buy Co. Inc. (BBY) isn't exactly the first name that comes to mind when you think about artificial intelligence winners. All the spotlight goes to semiconductor giants and frontier AI companies. Retailers? They're practically an afterthought in the AI conversation. But here's the thing about transformative technology: it doesn't stay locked up in server farms forever. AI is moving downstream into everyday devices, and somebody has to sell those devices to regular people.

Best Buy has always thrived when digital technology accelerates. Yes, there's an irony here. The products themselves are all about breaking free from physical constraints, which should theoretically make them perfect for online shopping. But consumers still want to touch things, see them in person, and walk out of the store with their new gadget that same day. That tangible experience has kept Best Buy relevant even as e-commerce has grown.

The company has been broadcasting this bullish story pretty loudly lately. Last year, Best Buy delivered breakout second-quarter results, driven primarily by the replacement cycle as consumers upgraded from older operating systems to newer machines. The third quarter brought another solid performance, with management actually raising fiscal 2026 guidance. The driver? Growth across key product categories.

But the replacement cycle is only part of the story. The latest laptops and mobile devices now come with AI baked directly into them, making these products genuinely more useful than their predecessors. When machine intelligence first emerged, access was limited to specialized channels and tech-savvy early adopters. Now AI is embedded in the platforms people use every single day. This isn't just an incremental upgrade. It's a genuine paradigm shift, and not having the latest technology could actually put you at a disadvantage.

Best Buy doesn't just stock these cutting-edge products. The company can also monetize product education and customer evangelism in ways that pure online retailers struggle to match. So while BBY stock hasn't exactly reflected this narrative (it's down 20% over the past year), there's a contrarian argument taking shape here.

What the Options Market Is Really Telling Us

Let's talk about how the market is pricing risk in Best Buy. When you look at the February 20, 2026 options chain and run the numbers through the standard Black-Scholes model, you get a fairly pessimistic picture. The calculated probability of BBY reaching the $72.50 strike price at expiration comes out to just 26.08%. But here's the catch: this calculation relies on a mathematical framework that may or may not be the right tool for this particular job.

The Black-Scholes model is only optimal by coincidence. There's almost always a better way to assess risk for any specific security, and that's where the opportunity lies with Best Buy.

Under Black-Scholes assumptions, the probability of BBY stock reaching $68.30 is roughly 44.1%. That's a massive gap compared to the 26.08% odds for $72.50, but this variance only matters if we accept that the model accurately reflects reality. That's a pretty big assumption.

Here's what the actual price action shows: over the trailing 10 weeks, BBY stock posted only four up weeks, creating an overall downward trend. From the outside, this looks bearish. Most investors would see this pattern and think the bears are in control. But statistically, this particular signal (four up weeks, six down weeks, with a downward slope) has historically tended to resolve upward, at least when you look at the broader sentiment regime going back to January 2019.

If this historical pattern holds, we'd expect BBY stock to trade in a range between $65.80 and $75 over the next 10 weeks (assuming a spot price of $68), with probability density peaking around $69.50. More importantly, probability mass should be fairly robust between $67.90 and $72.50. That gives us statistical justification for taking a contrarian view on Best Buy.

What's really interesting about the statistical response to this pattern is that probabilistic risk doesn't rise smoothly with distance from the current price the way it does under Black-Scholes. In the hierarchical framework based on actual historical behavior, the probability density at $68.30 and $72.50 are roughly comparable. But under Black-Scholes, as noted above, the variance is enormous: 44.1% versus 26.08%.

The Case for Custom Risk Models

It comes down to a choice between two approaches to defining risk. You can go with the crowd and rely on Black-Scholes, or you can be a genuine contrarian and follow a bespoke model built on how this specific stock actually behaves. The reason to favor the bespoke approach is simple: Black-Scholes is designed for everybody, which ironically means it's optimal for nobody.

Think about it. The same model used to price risk for BBY stock is also used to price risk for everything from semiconductor manufacturers to apparel companies. The only variable that changes is the implied volatility figure plugged into the formula. That's a one-size-fits-all approach to something that should be highly individualized.

When you analyze the distributional tendencies of a specific stock based on its own historical behavior, you're working with the actual characteristics of that security, not generic assumptions. Each stock has its own individual risk profile, and a universal model like Black-Scholes cannot consistently deliver the most accurate risk assessment for every situation.

Given all of this, the 70.00/72.50 bull call spread expiring February 20 looks particularly attractive. For a risk of $89, traders have the potential to earn a maximum profit of $161 if BBY stock climbs through the second-leg strike of $72.50 at expiration. Breakeven sits at $70.89, which adds to the overall appeal of this trade structure.

The fundamental story makes sense: AI is going mainstream, devices are getting smarter, and consumers need a place to actually experience these products before buying. The stock price hasn't caught up to the narrative yet, and the standard options pricing models may be systematically underestimating the probability of upside movement. That's the definition of a contrarian opportunity.