The Exchange 6/26/26

**SPEAKER_1** (0:04)
Good morning, students. Soccer teaches us teamwork, leadership, geometry, art, physics, and a lifetime of lessons we can take with us long after we leave the field. That's why Bank of America and US. Soccer are committed to helping bring soccer to every school.
Soccer is officially in session. Raise your hand to help bring soccer to schools at bofa.com/soccer at schools.

**SPEAKER_2** (0:30)
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com/marketupdatepodcast or find Schwab Market Update wherever you get your podcasts.

**Victoria Green** (0:58)
You're listening to The Exchange.

**SPEAKER_4** (1:00)
Here's today's show.

**John Ford** (1:05)
Welcome to The Exchange. I'm John Ford. In for Kelly Evans. And stocks are a little changed, a little in the positive at this hour with the S&P and NASDAQ on track for weekly losses. Oil is holding below 70 bucks a barrel, as President Trump calls the drone attacks in the Strait of Hormuz a violation of the ceasefire from Iran. Oil is down nearly 10% this week. Now chips, memory and momentum are under pressure, but big moves from memory this week with Micron up 20% in five days after earnings. Big tech mostly higher, Microsoft and Apple bouncing back after steep losses yesterday, after price increases from that memory crunch. And that's where we start today with the bifurcation in the AI trade. Wall Street's rewarding the companies supplying it, but punishing the companies buying it. Cristina Parcheneblas and Mackenzie Segalos are here looking at both sides of that trade. Cristina, let's start with you and the suppliers.

**Cristina Parcheneblas** (1:58)
Well, right now, every one of the largest names in the S&P 500 is lower this month, with one exception, Micron. And that is the bifurcation you're talking about in tech right now. Memory versus the Mag-7. Yes, of course, Sandisk and Micron are both lower today. After soaring yesterday, Micron hitting an all-time high, Sandisk up 22%.
So it's less of a reversal and more like a small unwind. Software also catching a bid instead, the IGV ETF up of over 3%.
But NVIDIA still remains below $200, which is a key technical level. And the Mag-7 as a group are underperforming the broader market by the widest margin in over a year. And the catalyst, Apple and Microsoft both raised prices this week and pointed to memory costs confirmation from two of the biggest buyers on the planet that the shortage is real and showing up in what consumers pay. Adding to the pressure, you had a report that OpenAI could push back its IPO to 2027 because of current market conditions and just the overall general concern about decreasing free cash flow specifically for hyperscalers. Wall Street's patience for the long expensive AI build out right now seems to be wearing thin. Investors are just rotating towards shorter duration. Money that essentially pays off right now, not years from now. Memories, earnings like Micron are showing that. The hyperscalers pay off though right now, we could argue is still a promise.

**John Ford** (3:20)
Yeah, Christina, this market when it comes to AI, is still high reaction, low conviction. I mean, I remember when this started off and the narrative was, oh, Google's in trouble because OpenAI is going to destroy search. And then, oh wait, Google's not in trouble. Actually, Google's the best. Oh, Apple's in trouble because AI, they missed the boat on it. Oh, it turns out the boat hasn't left for anybody yet. And then Apple's backup, it seems to me, like the core question is, can the providers, the end providers of these AI products and services deliver value? I don't know if it matters how much Apple has to pay for memory, as long as the users on the other end are willing to buy the product for the price they have to charge.

**Cristina Parcheneblas** (3:58)
Yeah. But to answer your question, that would require waiting how long, John, right? A really long time. And so right now, we're seeing that after a year and a bit of euphoria over AI and video could do no wrong, it seems like investors, especially retail are pulling back because they don't want to wait. And so they're constantly looking for these small pockets in the market where they can make alpha in a short amount of term, which is why you saw Optical climb higher, even though Optical may take longer too. You saw Memory being the biggest bottleneck. And then what next is it going to be? Is it going to be the electronic design machine software that is provided for a lot of these chip names? EDA? Is it going to be the semi-cap equipment names? Is it going to be a completely different part that maybe we're not acknowledging right now? So I feel like it's a reflection of patience. And then the other underlying theme too is just there's so much leverage when it comes to the retail crowd too, and that is also starting to unwind.