Are Chips Dead?
Market Rewind: July 20-24, 2026
I just want to start this off by saying how thankful I am for all of you here. Sorry if I have been a little bit inactive… I have been extremely busy and have been re-evaluating/gathering my thoughts, as I believe any good investor/trader should do. Yet, my theses did not change and stayed consistent.
Anyways, this week was a weird one. Seems to be carrying the theme we have seen for the last month. Investors worrying more about FCF than if companies halted ops and stopped researching AI. I will say, I am still extremely bullish on the AI trade/buildout. In my opinion, I would like to claim that the market read everything this week entirely backwards. Now, I know it is not my job to claim that the market is wrong, however, I do think it is my job here to spend hours upon hours formulating a thesis and try to explain, the way I understand it, what happened. And if you are scared from the title… TLDR; Nope, chips are NOT dead.
Quick disclaimer: I am not a financial advisor and nothing in here is ever financial advice. I write this to organize my own thinking and I do talk about names I own. With that being said, I may sell out of positions or add to them, start new ones, anything, at any time. As always, if anything I claim in here is wrong, please feel free to push back and help me so I can correct it. Accuracy is my goal.
Executive Summary
Equities: S&P down 0.60%, Nasdaq down 2.11%, Dow and Russell following. Semis were somehow green on the week, the index-level calm hid the widest single week dispersion I have seen all year.
Google Earnings: 2026 capex was raised from $180-190B to $195-205B, in my opinion this was no shocker. Negative FCF led to the unwinding and MSFT, AMZN, META, all got sold ahead of their own prints due to Google likely laying the floor for how they will go. Not to mention, Google beat on everything.
Oil: Oil crossed $100 again. Eleven nights straight of the US striking Iran, three Americans killed, Houthi attacks on Saudi shipping in the Red Sea, and Brent settled at $100.69 Thursday. Eventually sold off into Friday as Reuters released a report of a China-backed Pakistani push for US-Iran talks.
The Fed: June’s negative CPI print is now irrelevant to the market… not to me. Jobless claims at 187K vs. 212K expected, the 10Y hit 4.707% intraday on Thursday. Fed funds futures moved from roughly 52% to above 80% odds of a hike by the September meeting. July 29 is still a hold.
Intel: The quarter I have been waiting for. There is a lot to unpack here. Capex raise means more than you think. Selling off extremely hard after earnings is once again, because of a capex raise. I will unpack all of this in this article.
Advancing AI 2026: I was there. AMD launched the MI400 series, the Helios rack, and EPYC Venice at Moscone a couple of days ago. Anthropic at up to 2 GW of MI450 with AMD investing up to $5B, plus Microsoft Azure adopting Helios. AMD finished the week up ~5.3%.
Contents
I. The Tape
II. The Headlines
III. The Fed, War, & Data
IV. Earnings
V. Advancing AI
VI. Intel
VII. Rates & Commodities
VIII. From The Filings
IX. What I Am Watching (Next Week)
Bottom Line
I. The Tape
It is safe to say that we have been in some chop/capitulation. I assume the end is near. I could be wrong, but stay safe. Know what you own, this is where conviction gets tested.
Here are where things closed Friday, and the week:
S&P: 7,411.98, -0.61% — a second straight down week
Dow: 51,947.25, -0.38% — relative winner again
Nasdaq: 24,975.82, -2.13% — below 25,000 for the first time since April 30
Russell: 2,930.00, -1.09% — small caps rolled over with the rates
SOX: 11,818.89, +1.24% — semis were actually green on the week
VIX: 18.58, -1.0% — unchanged
10Y: 4.68%, +14bps
WTI: $89.31, +8.3% — Strait of Hormuz (that is all I have to say)
Gold: $4,070.80, +1.4%
Now here is something interesting that I found:
The market is simply transferring money to the sellers of compute from the buyers of it, in response to an earnings report. Now I know we have seen it the past month, but you cannot argue that it was not on full display here this week as well… for the most part. With that being said, AI is not over. Money is staying inside the AI trade, it just shifted, and I can say with utmost confidence that they will be back.
II. The Headlines
Monday, July 20: AMD lands MSFT, the war reasserts itself
The US completed its eleventh consecutive night of strikes on Iran, just hours after Trump warned Tehran will “pay” for the deaths of three American service members. Mediators floated a 10-day ceasefire but Washington downplayed it.
AMD announced MSFT as a Helios customer. MSFT will deploy AMD’s rack-scale Helios systems across Azure to serve frontier model inference for itself and its cloud customers, with shipments starting H2 2026. MSFT joins META, ORCL, and OpenAI as Helios adopters.
Hut 8 dropped a second 15-year, 352 MW, $9.8B lease at Beacon Point (in filings), which doubles the same investment-grade tenant’s contracted capacity to 0.704 GW and fully commercializing a 1 GW campus.
Tuesday, July 21: Semis rip
BofA added MU to its US 1 List (the firm’s highest conviction names), with Vivek Arya raising his target to $1,550. The logic behind said raise is: HBM demand running ahead of supply, MU’s future output already tied up in long-term agreements.
Wednesday, July 22: Advancing AI kicks off, GOOGL earnings
AMD’s Advancing AI 2026 opened at Moscone in SF. MI400 series, Helios rack-scale, EPYC Venice on TSMC 2nm, ROCm 7, and Anthropic committing to up to 2 GW of Instinct MI450-series GPUs in Helios. racks, with AMD investing up to $5B in Anthropic, with the first GW targeted in 2027.
SMCI pre-announced and the stock went completely vertical. Gross margin guidance of 15-17% against a prior near 8 and more than $60B in new orders. This datapoint wasn’t covered much to my knowledge, but it is pretty important, so I will be going more in depth on this later in the article.
TXN beat and guided up. Q2 revenue of $5.46B, +23% YoY and +13% QoQ. Growth was led by industrial, data center, and automotive. It looks to me like the non-AI economy is doing just fine.
GEV missed on EPS and raised everything else. Adjusted EPS $2.47 vs. $3.03 expected on revenue of $11.1B (beat). Orders grew 88% YoY to $24.2B, achieving a record $176B backlog, FY revenue raised to $45.5-46.5B. FCF guidance was raised to $11.5-12.5B from ~$7B.
NOW reported AH. Sub revenue $3.88B, +24% YoY. Then GOOGL reported…
Thursday, July 23: AMD keynote, capex, TSLA’s worst day in a year, Oil flew, and Intel crushed earnings
GOOGL’s numbers were absolutely stellar in my opinion, and I would think everyone would agree with this. Revenue of $119.8B, Cloud $24.8B, Google Services $94.5B, with a cloud backlog $514B. Gemini app at 950 MAU, AI mode past 1B, 22B API tokens processed/min, ~90% of the Fortune 100 on Gemini Enterprise. 2026 capex guidance raised from $180-190B to $195-205B, Q2 capex of $44.9B. FCF of -$5.9B, and the CFO said 2027 spend keeps climbing.
TSLA had an awful day. $28.24B revenue beat the consensus of $25.55B, but adjusted EPS of $0.33 missed the $0.49 and operating margin collapsed from 4.1% to 1.4%, as opex jumped 47% on AI and R&D.
Brent crossed $100 for the first time since May 22. Houthi attacks on Saudi ships in the Red Sea, continued Hormuz disruption, and the 11th+ night of strikes all contributed to this.
INTC crushed earnings, exactly what I expected. However, the theme of the week seems to be: capex is bad. I do not think this is true whatsoever.
Friday, July 24: Oil gives back and Korea sells
Korea-led memory rout seemed to hit everything. Mostly attributed to concerns and tariff pressure, yet no single clean catalyst that I saw.
Seoul announced that Samsung and SK Hynix will sign large long-term memory supply deals with US tech companies during president Lee Jae Myung’s Silicon Valley visit. Lee’s schedule included an AI summit + meetings with Jensen Huang, Sam Altman, Dario Amodei and Hock Tan.
Oil reversed off of my previously stated Pakistan path to new US-Iran talks at China’s urging.
New home sales rose 1.6% to a 628K annualized rate vs. 607K expected, keep in mind this is the first increase in 3 months, yet still -5.6% YoY. Global flash US manufacturing PMI 53.8.
III. The Fed, War, & Data
Two weeks ago I was writing about the June CPI print and how it killed the odds of a hike in July. I also stated that autumn’s decision is oil’s. Now, while that was absolutely the right call, we have to understand oil has made a decision based off of this war.
A week ago, fed funds futures put roughly 52% odds on at least one hike by the September 16 meeting. As of Thursday, that 52% is now above 80%. That is one of the fastest repricings in one week of this Warsh era.
Odds of a July hike for the meeting in 4 days from now (29) moved up as well. The important point here is the direction, last week July was a non-event and by yesterday it was a live meeting with a hawkish statement risk.
The current target rate remains 3.50-3.75%. Governor Cook, in remarks to this week, put inflation at 3.7% , “1,7 percentage points above our 2 percent target.”
The 13W bill 3.80%, 5Y 4.43%, and the 10Y above 4.68%, the 30Y 5.16%. Every tenor higher on the week. That is inflation-expectations being priced in… even more.
However, June’s disinflation was energy-led as we all know. WTI has rose ~25% in the past three weeks. Brent has moved roughly 27% in the same time period. Gasoline lags crude by roughly 2-4 weeks. The July CPI print comes out 8/12.
Now, the labor data made some of this worse. With initial claims of 187K against 212K expected, it removes the argument of labor-market deterioration. Warsh is staring at 3.7% inflation, supply shock in crude, and now claims at 187K. The rest of the week’s data is seemingly irrelevant to me.
Now, the only error the market is making (yes, I will point this one out), is that it is treating a hike as something new again. It has been priced in the entire time! A 25bp move from 3.50-3.75% to 3.75-4.00% in response to a war premium in crude is a credibility gesture, not a tightening cycle, and the Fed will say so. I know I sound like a broken record, and I will accept that, but I still do not think we will see a rate hike this year. Now, to that, I am completely okay with being wrong, nobody is 100% correct. However, I am willing to call it now and be the contrarian claiming we will not see a rate hike in 2026. Now, what data do I have to back this up? Glad you asked. I do not see this war going on for much longer, and if it does… then wow was I wrong. I have been calling this war ending “soon” for some time now it feels, but that does not mean I am wrong. If my timing is slightly off, so be it. When this war ends, which I will go out on a limb and say before the end of August… then we all know oil will absolutely plummet. I hardly ever share the trades I have taken, but I will post one trade I made a while back now on oil (BCOUSD). Here:
