On Thursday the AI trade looked broken. Micron fell 5.5%, Intel 5.3%, AMD 4.3%, and the Nasdaq gave up 0.8% on the same afternoon the Dow set a record. One long weekend later, the whole move reversed: the Nasdaq opened Monday up around 0.8%, the S&P 500 added 0.5%, and the premarket tape was wall-to-wall green in exactly the names that got hit — SanDisk, Western Digital and Seagate up more than 4%, Marvell up nearly 4%, Intel up 3.5%, Oracle up 3%, Micron up 2%. A quiet geopolitical backdrop helped. The selloff, it turns out, lasted two trading days.
The explanation making the rounds is Goldman Sachs’ trading desk, which put a number on the June slide: momentum stocks fell 24% from their peak, the deepest drawdown since early 2023 and double the historical average of 12%. The desk’s diagnosis was that nothing fundamental broke — thin summer liquidity and crowded positioning amplified a routine pullback, and buy-the-dip flows are already showing up. Intel handed the bulls a fundamentals argument on cue, confirming Monday that it is raising CPU prices: $30 to $50 on consumer chips, hundreds to thousands of dollars on server parts. Companies don’t raise prices into dying demand.
What makes this week different from a normal rebound is that the referendum is already scheduled. Samsung reports preliminary second-quarter earnings Tuesday, with Wall Street expecting a record profit on HBM memory demand. And SK Hynix confirmed Monday it will raise roughly $28 billion in ADRs, trading on Nasdaq under the ticker SKHY starting Friday — the largest US listing ever by a foreign company. The deal is priced at about 6.2 times forward earnings against Micron’s 7, after both stocks gained roughly 700% in twelve months and crossed $1 trillion in market value.
Our take: A bounce on thin holiday-week volume proves liquidity came back, not conviction. The real test is mechanical: $28 billion of fresh AI paper hits the tape Friday, five days after the market demonstrated it can mark the sector down 5% in an afternoon. If SKHY prices clean and trades up, June’s drawdown goes in the books as noise and the AI trade gets its second wind. If it wobbles, Goldman’s own caveat — that the drawdown could double if deleveraging resumes — becomes the next headline. Either way, you won’t have to guess. The verdict has a date.
What to watch
- ISM services, this morning. The one meaningful macro print in a light week — after June’s 57,000-job miss, a soft services number feeds the rate-cut trade that’s been carrying the Dow.
- Samsung’s preliminary Q2, Tuesday. A record is expected; the tell is whether HBM commentary confirms the demand curve that justified memory’s 700% year.
- SKHY’s pricing and first trade, Friday. The order book on a $28 billion deal is the cleanest read on institutional AI appetite you will get all summer.
- Volume. Goldman’s whole thesis is that thin tape exaggerated the fall. Thin tape exaggerates rallies too.