Torque in Tech, Macro Shifts, and Earnings Exchange 8/3/26

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**Kelly Evans** (0:45)
You're listening to The Exchange. Here's today's show.
Thank you very much, Scott. Microsoft and Amazon are powering higher again today after last week's massive rallies. I'm Kelly Evans, and welcome to The Exchange. The memory stocks are some of the weakest in the market today, as China's largest chip maker, CXMT, is reportedly planning a second chip plant in Beijing. Western Digital down nearly 4% as it and Sandisk get ready to report earnings this week. On the flip side, Microsoft and Amazon up 5%, with Amazon hitting a new all-time high today. It's having its best week in more than a decade. And get this, Microsoft on pace for its best week since 1999
And this is after they soared on earnings last week. We'll talk to Gil Luria in just a bit. He thinks Microsoft will lead the next leg of this AI trade. We also have Boeing popping 5% today as the FAA certifies the 737 MAX 7 to fly. And as oil prices slide after the president halted an attack on Iran that he said would have been the biggest since World War II. We'll get the very latest from the White House. But let's begin with this massive torque in the tech trade last week. And today as well, we had the semis in software seeing a huge bounce while the MAG 7 continued to rupture as a group. And today, the memory names are leading the declines. Travis Prentiss is CIO of the Informed Momentum Company. He's joining us in today's opening exchange.

**Diana Olick** (2:08)
Travis, it's good to see you.

**Kelly Evans** (2:10)
And how would you describe what's going on with this trade here and the markets more broadly?

**Travis Prentice** (2:15)
Yeah, it definitely was a rough July for the broader AI trade, most notably, like you said, semiconductors and memory stocks.
It's too early to say whether, I think the jury's still out whether this is a change in narrative or just a correction. But certainly, there was some damage done to the trade and it's gonna take some time to heal as far as the technical damage and the trends are concerned.

**Kelly Evans** (2:40)
When you say damage done to the trade, is it the kind of damage that makes you wanna come in and snap up these stocks because they're way off the highs or the kind that makes you question whether the, you know, we're moving on.
In the same way that we kind of had the NVIDIA moment, it's holding its own, don't get me wrong, but the market kind of moves on. Is it moving on from the memory trade?

**Travis Prentice** (3:03)
It's tough to tell now. I think right now it's not time to be a hero. I think the trade is definitely flashing a caution signal, some flashing yellow lights perhaps.
But I think right now it's time to manage risk, monitor these trends and be open to wherever the trend either re-inserts itself in terms of the memory and semiconductor or actually new leadership. But I also think what's interesting within the broader AI trade is not every company leverage to AI is having a rough time. In fact, we see a very strong confluence of both price momentum and fundamental momentum in the AI trade that's leveraged to the rise of AI agentic traffic, whether it be security stock or Palo Alto.

**Kelly Evans** (3:50)
Let's say that again because this is important. You're seeing the strongest part of the AI trade for fundamentals and technicals in the AI agentic trade and continue.

**Travis Prentice** (4:00)
Yeah, sure. Certainly. I think it's time to look at stocks from a stock by stock perspective. And certainly at the informal momentum company, we're looking at single stock trend and we're looking at the idiosyncratic nature of what's driving both their price trend and their fundamental trends. The intersection of both those things. And so within the AI trade, you have companies that are levered to the rise of agent traffic. So things like security, networking.