Big Tech’s Big Week, Time for Some A.I.R (AI regulators), and a China Chip Debut 7/27/26

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**Kelly Evans** (1:02)
Thank you very much, Mike. The next big test for the AI trade, a mega chip IPO in China, and a Fed decision this week. It's a big one. I'm Kelly Evans, and welcome to The Exchange. Stocks are mixed, like Mike just mentioned, S&P down a quarter of a percent. We're well off earlier highs despite that cooling of tensions in Iran, and a big drop in oil prices. WTI down 7 percent as both sides agree to pause hostilities for now.
Meantime, the chips are under pressure including the memory space. The DRAM ETF down 4 percent, not helped by a Chinese state-backed company planning mass production of chip making machines. Also in China, a blockbuster IPO with CXMT surging more than 460 percent in its debut. Meanwhile, concerns over AI spend and circular financing continue. NVIDIA reportedly providing a $250 billion backstop to OpenAI, those shares on pace for their worst day since early June. As Sam Altman heads to the Hill to pitch policy makers and former Nasdaq CEO Bob Greifeld says, the only way to get AI right is to establish a national regulator. He's here to make his case. But we begin with tech today as four of the Mag 7 get ready to report earnings this week. And the debate over how much AI spend is too much or too little continues. Apple, by the way, hitting a new all-time high today. Let's bring in Michael Sansaterra. He's the Chief Investment Officer at Sylvant Capital Management. Michael, how are you getting ready for things?

**Michael Sansaterra** (2:27)
Just going through all the numbers, making sure expectations are manageable, and just getting prepared to see the delusion numbers we're about to see this week, Wednesday and Thursday.

**Kelly Evans** (2:37)
What was your reaction to Google's CapEx number last week?

**Michael Sansaterra** (2:40)
Actually, we were fine with it.
There's no surprise, there shouldn't be any surprise to AI investors at this point that 2006 and 2007 CapEx is still going higher. The good news is, is the rates declining, if that makes you feel better. But we're okay with it. We recognize this is a grab-compute time. This is a time to extend your lead if you are Microsoft or Amazon or Alphabet. That's what they're doing. No surprise for us.

**Kelly Evans** (3:05)
How about these, you know, in China, CXMT, we've been talking about this IPO for several weeks now. They don't do the highest level, you know, memory stuff, the high bandwidth memory for specifically for AI, they do a lot of the rest of it and it's a very tight market.
What's your response to the IPO? Is it something you'd consider investing in? Does it disrupt the likes of Micron and other memory names here?

**Michael Sansaterra** (3:26)
Yeah, we don't think so. It's not something we're looking at closely right now. Of course, we'll take a look at it as time passes, but I don't think that lower end of DRAM is particularly attractive at this point. You want to stay a little bit more focused on the higher portions.
Now, China has been making this stuff for some time now. It's just a matter now of how much bigger will they get. And the market itself in China is really quite large as well. So I don't know that it actually has to cross over into the United States. I suspect that they'll have plenty of business in China, probably be very, very focused there for a while. Right now, we're not looking at it.

**Kelly Evans** (3:58)
That DRAM chart we're showing right now, kind of from April up through now, you can see it going up the hill. It's a round-tile memory ETF. Coming over the hill, it's really moved broadly lower in the past couple of months.
How do we finish that chart, you think, into the end of the year?

**Michael Sansaterra** (4:15)
Yeah, I think you have to be a little bit patient, but I think we're still higher over the next six months. Remember, if you look back even at the Sox's retracement, it's been a 25 percent pullback, largely due to memory, and yet it's still up 100 percent in the last year. And earnings, broadly speaking across semis, we're up 120 percent in that timeframe. So we overshot it slightly, and now we've seen the pullback. I think that's normal digestion. I think that probably clears itself pretty quickly. But in the meantime, it's got a lot of folks nervous.