BTIG Warns Still A Long Way To Go In AI Correction

BTIG Warns "Still A Long Way To Go In AI Correction"

BY TYLER DURDEN MONDAY, JUL 27, 2026 - 09:05 PM Reports that Nvidia is in talks with OpenAI (private) to guarantee $250bn of financing for Data Center was initially greeted with optimism. But, as BTIG's chief technical market strategist, Jonathan Krinsky, points, as always we are not as concerned with the 'news' itself as the price action to the news, and that is certainly standing out to us today with semis fading from green to down almost 4%.

That sort of trade in the face of a well publicized 'backstop' suggests we still have a ways to go in this AI correction. There were also two news items out of China overnight: ●​ Chinese memory maker CXMT opened up dramatically after its IPO siganling that China is becoming increasingly self sufficient in DRAM removes a major source of demand from the global memory market while simultaneously adding domestic supply.

●​ A Chinese company has begun mass-producing homegrown immersion DUV (deep ultraviolet) lithographymachines for the first time (which also reinforces the China self-sufficiency argument)... ...so perhaps those issues are also weighing on the group, as Goldman's Rich Privorotsky noted earlier: "That’s a structural overhang for memory pricing". Regardless of the news, we continue to see meaningful downside for the group and think a test of the 200 DMA (-22% for SOXX) is a fairly likely outcome, but not one many tech investors are prepared for...

Mo' Unlikely to Hold. High-Beta momentum now coming into its 200 DMA.

BTIG's Krinsky does not think it holds, which would open the door down towards the March lows (-23%).