Could China Finally Pop the AI Bubble in 2026?

This week on Talking Wealth, Filip Tortevski and Pedro Banales ask the question: could China finally pop the AI bubble in 2026 and why it’s relevant for investors. We examine China's latest AI and semiconductor breakthroughs, what they mean for major technology companies, and whether the AI boom faces its biggest challenge yet.

• 0:01Speaker 00

  This podcast is brought to you by Wealth Within, a global leader in stock market education. For more information on our courses, head over to wealthwithin.com.au. Please note that the information in this podcast should not be considered personal financial advice. Enjoy.

• 0:22Speaker 01

  Welcome to the Talking Wealth podcast. You're on with Phil and Pedro. And today we're asking the question, could China finally be the catalyst that pops the AI bubble? Over the past few weeks, there have been some major developments in the AI and semiconductor space that investors need to be aware of. While the AI revolution has created some of the biggest winners in financial markets, China is starting to challenge some of the assumptions that have driven that incredible rally. So today, we're going to unpack what's happening with China's semiconductor ambitions and the rise of new AI models that are challenging US dominance and what this could mean for some of the biggest companies in the world, including Nvidia, TSMC, and the broader technology sector. So as always, we'll share

• 1:07Speaker 01

  our thoughts, discuss these trends and where they're heading and look at what investors should be watching as the AI's race continues to evolve. So before we get into it, Phil, how are you going?

• 1:20Speaker 02

  Good, good, mate. Very good. This will be, it's always nice to touch base with what is going on with AI, given it is such a, an evolving space and right now it's falling. So I know there's probably a lot of jitters out there because a lot of the market or a lot of investors are in these, those names that you said, Nvidia, TSMC, and a lot of the tech space. That's literally where the flow of money's gone over the last couple of years. So this will be very interesting and maybe also interesting for those Bitcoin holders, because I know a lot of the Bitcoin's latest demise, if you will, or fall, normally Bitcoin around these times has been picked up, you know, after dips by the dip and all

• 2:05Speaker 02

  that kind of stuff. But what we have seen is even from the big end of town institutional flow. Dive into things like SpaceX and and prepare itself or allocate takeaway capital from crypto and start allocating it in these new ventures related to AI. So it'll be interesting to see if that scenario changes again um with with what you're about to show us.

• 2:28Speaker 01

  Yeah, yeah, definitely interesting dynamic there and and as most people would know, Bitcoin is a risk on asset and so a um tech technology stock. So if they start to suffer, obviously, interest rates and all of that is a different topic altogether. We're not going to really get into that, but just cover some of the the major stories that have come out. And I think that this is one that we should definitely take note of. And that is that China has had a chip making breakthrough, apparently, right? So this is coming from Reuters. There's multiple articles on this, but the one on one aside is from Reuters that China is starting production on a homegrown immersion D U V chip making tool.

• 3:12Speaker 01

  Now, for those that don't understand what a D U V, it's a um uh it's a deep ultra, not a DUI, no, driving under the.

• 3:23Speaker 01

  That's uh that's mostly in Australia that we have those, but uh they're doing a D U V, which is much more productive. It's a deep ultraviolet lithography machine. So basically, these are uh machines that are typically made um uh D U V machines made. I'm just gonna make sure that we've got these Netherlands, that's right. So I I I thought that it was in the Netherlands. Usually, uh they come out from a company there and they um they've got, America has put a trade ban to ban these machines getting sold into China. And these are the machines that make the semiconductors.

• 4:05Speaker 01

  And uh you know, Taiwan has the majority of them, I know, in in uh in Korea, you know, Samsung has some. And uh they are, they use these like little like lasers that I've seen some examples of how they work. Basically, if you imagine a dot and then you put it in a box and then you you know you shake that around and then the dot is is going around everywhere and you're trying to hit that dot with a laser. That's basically what they're doing and and it's like it does it with such precision. Um. And and that's how they can get those really miniature in like inscriptions into the the semiconductors to make them much much more powerful in a smaller form. That's basically the, you know, how they work.

• 4:49Speaker 01

  So they're very high end machines, very expensive. Uh. They've been barred, you know, to be sold to China. China hasn't had them. That's why they haven't been able to create uh semiconductors or chips or things like that, the high end ones anyway. But now it looks like a company and they haven't disclosed which company it is yet. So it's just a source saying that they've um they've crea- they've they're about to release one. And I did hear that, you know, from one source that it's going to be they're going to release uh roughly the machines are planned to produce about five this year. And then roughly twenty twenty twenty seven.

• 5:31Speaker 01

  So there's going to be five released this year, twenty and twenty twenty seven. Now, this is obviously shaking the market a little bit because I mean, the this whole A I story has been built on uh one basically T S M C company owning the majority of the share in the semiconductor space, Nvidia as well on top of that Micron. Uh. You know, they're the ones that that that create the the the plan and then T S M C makes those chips. Now, if China comes out and as China does, they create things for cheaper uh and at higher volumes. If if that's the case, then T S M C could lose their market share, Nvidia uh could lose their market share.

• 6:15Speaker 01

  You know, sa- same with the other big uh semiconductor companies.

• 6:19Speaker 02

  Yeah, it's it's always a thing, like whenever a company has a moat or has dominance. When that competitor comes up. And like you said, if that competitor is China, like we saw it with DeepSeek not long ago when, you know, the US brought out the AI. And DeepSeek thought, well, let me have a go at this and basically destroyed it in terms of cost. Um, now the model wasn't as as good to some were saying, but. But nevertheless, I mean, you know, China, look what they're doing with the car manufacturing space. I mean, they are.

• 6:56Speaker 01

  Yeah.

• 6:56Speaker 02

  They are destroying Europeans in in terms of. Um, you know, what they can produce at the cost and and and what the the um.

• 7:05Speaker 01

  And Japanese.

• 7:07Speaker 02

  And Japanese, too. Yeah, Toyota, I mean Toyota's in.

• 7:09Speaker 01

  Yeah.

• 7:10Speaker 02

  They're openly saying we're in big trouble. So is Audi, so so is a lot of car companies, but. Uh, uh, it's not about car companies, it's about China, like you said, and. And um, you're right, mate, you know, you get a competitor come through, the uh destabilizing competitor. Those stocks that you said Nvidia, TSMC, and I think be be careful.

• 7:30Speaker 01

  Yep, for sure, for sure. Uh, and you know, you talk about DeepSeek, we're gonna be talking about a different AI model. Uh, after this for the second segment, because that's another uh precipice that that could. Uh, affect this AI bubble. But you know, just keeping on this.

• 7:48Speaker 02

  I I hope you're not talking about the the big S word, that that that anthropic have come out and started talking about. Uh, the sing- the singularity is here.

• 7:59Speaker 01

  Oh, they, all right, finally, I know that there's been different predictions about singularity and.

• 8:05Speaker 02

  That's what they're saying, as Sam Altman, Sam Altman the other day I read was was saying, you know, singularity has been achieved. Which is pretty crazy.

• 8:15Speaker 01

  Until we have chips in our brains, I don't think that's uh.

• 8:18Speaker 02

  I don't know, it's a bit scary. To be honest, I've seen enough Matrix and Terminator movies to know how this ends and it's not.

• 8:25Speaker 01

  Yeah.

• 8:27Speaker 01

  Now, uh, one caveat that I would say uh for this whole China story, right? So they can create the machines. To actually manufacture the semiconductors, uh, much like TSMC.

• 8:39Speaker 01

  But they lack the ability to actually design them. Because usually the designs come from IBM, all American designs. Americans are really good at designing the chips. That's where their moat is. So what they basically do is, you know, with these like little microscopic microscopes, they design all of this circuitry and then they send that to a TSMC and then they they manufacture it. So even if China can create these machines, America could just say, yeah, well, good on you guys. But we're just not going to give you the the plans. We're not going to give you the the design.

• 9:19Speaker 02

  But for how long?

• 9:21Speaker 01

  Um, um, yeah.

• 9:24Speaker 02

  You know, if you go throughout the history, they've always been able to get it done. China, one way or the other. So.

• 9:32Speaker 01

  Yeah.

• 9:34Speaker 02

  For how long?

• 9:35Speaker 01

  Yeah. It's just like, you know, going back to cars, like Elon Musk was so excited about opening up a a car manufacturing plant in China. Remember that Tesla, you opened up a huge, suddenly, suddenly all these Chinese EVs started coming out. They were eerily similar to the to the Teslas.

• 9:53Speaker 02

  Yeah, funny that, you know.

• 9:57Speaker 01

  Yeah.

• 9:57Speaker 02

  And that's been, and that's been the way with, that's been the way with a lot of things, you know. The world gave China manufacturing and not only it benefited, you know, a lot of companies, obviously because of the cost of labor, higher profits. But at the same time, they gave away a ton of IP. Um, and that's the trade off. So, but this is, this scenario is, like you said, is a little bit different because they're not, by all report, and I don't know what you what you've uncovered, but for now, it seems like, you know, they'll get the machines, but not necessarily have the blueprint.

• 10:33Speaker 01

  The blueprint, exactly, the IP. But even still, all of this is already starting to crack the story about the semiconductors. And even if it doesn't come into play straight away, it plays on on people's sentiment. And as you and I know, the market runs on on sentiment, really. You could have a story that is not quite there yet, yet the valuations are a hundred times. Or you could have something that is completely over, you know, undervalued, but people aren't aware of it yet. So we can definitely see, start to see the sentiment turning. And I think that this, this has put a bit of a dampening on that anyway.

• 11:14Speaker 01

  So, you know, talking about that sentiment, this is going on to part two. This is another thing that has dampened sentiment. And this is another deep-seek moment, like you mentioned earlier. But this one is in the form of Kimi AI. So Kimi AI, it's from a company called Moonshot AI, released the latest model called Kimi K3. According to Tom's Hardware, so that's the the website that we're citing here.

• 11:43Speaker 01

  The significance is not only the size of the model. It's that China is showing that it can produce highly competitive AI systems despite having less access to the world's most advanced chips. So even though they don't have the the AI chips and they are developing the hardware to do it. They're still being able to to meet or even beat those benchmarks. I mean, this one, they're talking about it beat Claude Fable five in front end code arena benchmark. Now, I'm not sure the the details of what this front end code arena is. But all I need to understand is that it's beating Claude Fable five. And Claude is a very powerful AI model. Now, for them to be doing this without the the top access to to hardware.

• 12:29Speaker 01

  They're going to learn some valuable lessons from this. And when they do have the hardware that they require, is that going to multiply them even even more?

• 12:39Speaker 02

  Yeah, well, I went and did some research, front end code arena, what it is for people that do wanna know. It's a benchmark that measures how good A I models are at building real websites and web applications, rather than answering coding questions or writing isolated functions. So instead of asking a model something like write a sorting algorithm, it gives prompts like build a responsive dashboard with charts, dark modes, toggle, logging pages and animations. So pretty, um, pretty detailed is, is what they're beating it at. And like you said, mate, um, supposedly without the, the, um, tools that the West has, being able to continuously produce.

• 13:24Speaker 02

  And I don't know so much about, you know, what they have and what they don't have. Cause you've got to remember, we're talking about China here. We don't, we never know the full story of what they have and what they don't have. Nobody but China knows. And, and, and that's also, um, playing into, I think, these jitters now, these fears around, okay, what do they have? How close, how close are they? Cause Jensen Huang has openly come out and said, you know, they're, we should be concerned. Like he's been asked before about China's com- as a competitor. And he said, yes, we should be concerned. We are in front right now, but it won't last. They, at some point they will catch up.

• 14:05Speaker 01

  Yeah, and that's why he wanted to push so much to, to push Nvidia chips in there. So then at least the U S owns the coding and the infrastructure that they're building it on. Uh, but he got pushed back at the beginning and then they, they gave him the, the go ahead. Okay. Well, now you can sell. And then China turned around and said, nah, we know your game now. We're, we're all right.

• 14:23Speaker 02

  We're fine, we're good ourselves. Yeah.

• 14:26Speaker 01

  Hmm. Uh, and I've even heard of, of some companies in China going to, you know, across the sea to Singapore or Malaysia or something, training a model there where it's not, uh, you know, on, on the Nvidia chips, where they're not banned and then putting it on a hard disk and, and sending it back to China.

• 14:45Speaker 02

  Oh, oh, yeah, listen, it's, I think it's not going to be as hard as, you know, it may seem to, to get what they need to get.

• 14:56Speaker 01

  Hmm, yeah.

• 14:58Speaker 02

  I doubt it.

• 14:59Speaker 01

  There's a market for everything, basically.

• 15:01Speaker 02

  Right.

• 15:03Speaker 01

  Um, so I mean, that's, that's a second.

• 15:06Speaker 02

  Version of Tom Cruise's Special Agent undercover.

• 15:09Speaker 01

  Yeah, smuggling hard drives.

• 15:12Speaker 02

  Mission Impossible style.

• 15:17Speaker 03

  Hey, podcasters, you're here for a reason, to become a more confident and profitable trader. And you can achieve this because it's all about having the right knowledge. We have a course that will suit you and improve the profits you take from the market. Curious to learn more? Head over to Wealth Within and check out our trading courses.

• 15:40Speaker 01

  So that, I guess, that ties into now the third part, third final part before we get into the stocks, which is the AI spending boom. So all of this is tied in together.

• 15:50Speaker 01

  Now, most people may not know, but, you know, Google and Meta and all of these big companies are now in reporting season. And they've, they've released a lot of capital expenditure on, on AI. And it's actually caused their cash flows to go negative for the first time. And, um, which is causing a little bit of a concern. So if, if you've got these big behemoths spending billions of dollars, and I've got the numbers here. I actually looked up the, the, the numbers of, of how much, um, AI spending is. So tech AI spending may approach 700 billion this year, 700 billion.

• 16:30Speaker 01

  If they're investing all of this money and then, and that's according to CNBC, by the way. If they're investing all this money and then suddenly China comes out and says, well, you know, you can have this AI model, it's open source, nothing, it can do most of the things. You don't need all this front end, you know, frontier models to do all of the, the basic tasks that you need to do, like reply to emails or, or summarize things or whatever. We can offer you this for, for a fraction of the price. Plus we're, we're doing our own hard, hardware and all that. Far out, I mean, this this AI spending um could could actually take the rug off from underneath them.

• 17:08Speaker 02

  Oh, yeah, yeah. And that's that's always been the concern because the the bigger you go, the more you you um advance with the AI, the more uh the more it requires in terms of infrastructure, in terms of spend. So it's like this ever growing spending machine. Um, and at some point, the the other side of that coin begins to diminish. At what point the the the gains diminish spend? At what point does spend um make it not viable relative to what what's going to come in? I don't know. Um, exactly, but the amount of spend going on is is huge, like unprecedented.

• 17:53Speaker 02

  Um, and we're talking about technology. We're not talking about spend in like something, uh, for example, let's say we found a cancer vaccine. And we pour ridiculous amounts of money in the facilitation of that vaccine throughout the world, or whatever, some kind of treatment.

• 18:13Speaker 02

  There's there's an end result to that. This is technology. Like you said, tomorrow, something can change. Quantum can come in. Something can change that renders all of this spend obsolete, or that just renders the technology obsolete. Or the hardware obsolete. So I get it, the demand is still there right now, and and and I think the big question, or the big thing uh for any investor is just uh consistently keep an eye on demand, you know, keep an eye on demand, keep an eye on on where where it's it's all moving. Because that's going to give you the confidence um to continue to invest in something like this because.

• 18:59Speaker 02

  If we've outstripped demand, um.

• 19:03Speaker 02

  And think about where it's going in terms of is this going to be. Is this going to be a retail tool? Is it going to be an institutional tool? What sectors of the economy? Um, will have it for growth? These are all the questions beyond ten years, beyond twenty years. Um. These are all the questions I'd be asking.

• 19:29Speaker 01

  Yeah, yeah, and I think it's more dangerous than ever, you know, I've heard of um. Technology being um compared to that hockey stick effect. So if you imagine a hockey stick, it's very flat and then it starts to taper off and then it goes very vertical. And I think that we're at that very vertical in terms of um exponential kind of developments. Because if you think back to two thousand and ten, right? And you're a technology company and you're investing in a certain software. You can, with a high probability, degree of probability, you could assess what the next five years look like, right? Um, people are still going to be using Excel, Microsoft and things like that. So you can afford to put in all of the spending.

• 20:13Speaker 01

  People are still going to be using the internet, they're still going to be searching things and all that. So the spending justified the means. But now, try to predict what the world is going to look like or what technology is going to look like five years from now. You know, five years have become so much harder to predict now. And even somebody like Elon Musk, you know, he tries to predict things and he's gotten a few wrong already. Um, somebody that's at the forefront.

• 20:39Speaker 02

  Yeah, let's not even get on his case. I saw him the other day coming out saying, oh, what are you saving for? You're not going to need money.

• 20:47Speaker 01

  Yeah.

• 20:48Speaker 02

  You know, in the future, and it's like, yeah, sure, coming from the guy that's got all the money. You know what, guys, you won't need it, it's okay.

• 20:58Speaker 01

  Yeah, exactly. We're going to take care of you.

• 21:00Speaker 02

  The guy that could actually end poverty in some countries with how much money he has.

• 21:05Speaker 01

  Yeah.

• 21:05Speaker 02

  By just paying an extra five percent tax. That guy, nah, it's alright, don't worry about it, just keep spending, keep spending on on AI for me, please. You don't need to save your money. You won't need it.

• 21:17Speaker 01

  Yeah, yeah, I don't believe in this whole basic, well, basic income. I mean, I I believe that it would be great if if if it could be implemented, but I don't believe that it's going to happen. There's no incentive here. What what would they? They'd be just pretty much paying humans just to consume. Because what else, uh, you know, let's face it, governments um support us, so then we can support the economy and support governments back. Uh, if without, if we're not little productive units in the economy, then then then what are we? Um, so.

• 21:51Speaker 02

  And then people, and also people were like, oh, you know, uh, it'd be amazing, because, you know, you could chase your your your purpose or your passion. Um, and I think that talks to such a small segment of humanity, because you've got the creatives. Who probably don't like their job if they're in a normal job. You often see it with a creative that says, oh, you know, my job's boring or whatever. But there's a large segment of people that are happy doing what they're doing. They find purpose in their their current, whatever they do, whether they're a a, you know, a tradesman, whether they're. You know, um, white collar, blue collar, it doesn't matter. They find purpose in what they're doing.

• 22:32Speaker 02

  Um, and and I think purpose is the biggest thing that keeps everything stable. Um, if there is a basic, and we're going way off topic, but. If we do get to a scenario like what Elon's saying, and AI can do everything for you, and there's no need for money, and you don't, well. Humans without purpose, I, in my opinion, turn to turn to the next option, which is, okay, vice.

• 23:01Speaker 01

  Hmm, anarchy.

• 23:02Speaker 02

  Right? What what if you've got nothing to do? What what do most people do? Drink and take drugs.

• 23:08Speaker 01

  Yeah.

• 23:09Speaker 02

  Or.

• 23:09Speaker 01

  Well, he, his argument is that A I will give you everything that you want, anything that you desire. A I will give it to you, but.

• 23:16Speaker 02

  But who's gonna be paying for that A I? It won't give me purpose. That's what it won't give me. And if you're driven by purpose, then you, it doesn't give you what everything you want.

• 23:24Speaker 01

  Yeah, yeah, that's, that's a very good argument, I think. Definitely, because that, that's one of the things. I think it's one of those hierarchy of, um, I forgot the guy's name, but he was a philosopher and he was saying that. That's one of the human hierarchies that, that you need to survive and one of them is purpose. Uh, every human needs to have a purpose.

• 23:42Speaker 02

  Yeah, part of, part of the journey, struggle, his success, his highs and lows is. You know, the reptilian side, you go out, you hunt.

• 23:51Speaker 02

  You have good days, you have bad days. Uh, you know, and, and this system allows for that. People beg capitalism, but hey, man. Never in, in history can you start from nothing and become something in this environment. We've had more millionaires and billionaires than ever before. Um. And yet people still beg the, the, the system and the environment. Oh, it's bad or it's not fair. Yeah, it's, it can be corrupt. Okay, so what? But. Look at the good things about what it does.

• 24:21Speaker 01

  Yeah, yep.

• 24:23Speaker 02

  Go try living communism and see how, and see how happy you are. Or, or there's a reason why people run from that.

• 24:30Speaker 01

  Hundred percent. And look, we, without getting too, too far off, off topic, you know, that's some. Uh, some good points. Uh, let's get into some stocks, but before then, I just wanted to quickly highlight. Um, this recent, uh, report that came out from Goldman Sachs. This is very interesting. So in July twenty twenty six, a report from Goldman Sachs. Uh, analysts Matthew Ross and Tony Wu, so credit to them. They flagged thirty five A S X listed companies facing high risk of workforce reductions. Due to soaring labor costs, outgrowing sales. And companies increasingly leaning to automation and A I integration.

• 25:11Speaker 01

  So now this is coming back home now, this is coming to Australia. Now, some of the key ASX companies that they flagged, banking and finance, we've got NAB, Bendigo Bank and Bank of Queensland. Now, we already knew this, we we we covered this a few times, we we saw this on their reports. Retail and consumer, Coles, JB Hi-Fi, Treasury Wine Estates, Nick Scali Endeavour Group and Breville Group. Health and Services, Cochlea, Sonic Healthcare, Anso Limited. Tech and Platforms, you've got Ysteq Global, Pexa Group, Aussie Broadband. Now, Ysteq as as well, we've we've also covered Ysteq, there's a huge,

• 25:53Speaker 01

  I think there's thousands of jobs that were sold off uh already in in Ysteq. And then just other industrials, we're talking about Generation Development Group, AUB Group, Electro Optic Systems, E O S, Brambles, Seek, Cleaner Waste Management. So you can find all these in in the Australian Financial Review, um you know, if you're looking for the article, but that's quite concerning. That's that's big, big ASX listed companies there, you know, potentially laying out big jobs.

• 26:22Speaker 02

  Yeah, and and it's funny, a lot of those ones you just mentioned, their share prices are rising, coming into earnings season. So, and I remember, um if you remember back in March, uh the previous earning season, um that we had, sorry, it was, yeah, February, February.

• 26:39Speaker 01

  February.

• 26:40Speaker 02

  February earnings. Um we, a lot of companies that got rewarded, that saw share price appreciation was on the back of cost cutting through AI. Now, twelve months in, we're gonna see, you know, really the full effect of that on on a, you know, full calendar year. Um, and it's interesting to me that like, in light of a a a lot of the economic conditions that that say a lot of these discretionary stocks should be not performing, and some have, it it it's true to say, you know, like the Nick Scali's, like the Lovissas, like the Harvey Normans. Um, they they, the share prices have been down, along with Treasury Wines, but in this last month,

• 27:24Speaker 02

  they they've started to pick up.

• 27:26Speaker 01

  Oh.

• 27:26Speaker 02

  Um.

• 27:27Speaker 01

  Treasury Wine's had a good rebound lately, actually, yeah.

• 27:31Speaker 02

  It's had a rip off recently. Yeah, yeah, yeah.

• 27:33Speaker 01

  Hmm.

• 27:34Speaker 02

  And and maybe, maybe we're gonna find out during earnings, um or this full year earnings that. The AI implementation has been amazing to the bottom line.

• 27:44Speaker 01

  So that's the opposite side of this whole AI bubble thing. These would probably be the beneficiaries of it because they're the ones, while everybody else is fighting to be the majority player in the AI provider space, these are the consumers of AI and they're reaping the benefits from lower cost due to competition.

• 28:05Speaker 02

  I mean, lower cost also due to destroying the labour force, but getting rid of jobs. It's a bit of a catch 22.

• 28:16Speaker 01

  Of course, there is that factor. I'm a believer that AI will create more jobs in the future. We just don't know what they are yet. But of course, there's that other side that, yeah, we have to go through the struggle before we get to the other side.

• 28:30Speaker 02

  Hmm, yeah.

• 28:35Speaker 04

  Hey, podcasters. Are you trading the share market but want to take your knowledge to another level? Dale's award winning book, Accelerate Your Wealth, will get you there. Learn to master the stock market with trading strategies that will exceed your expectations. Secure your copy now by visiting the shop on the Wealth Within website.

• 28:56Speaker 01

  Shall we have a look at some of these earlier stocks that we mentioned? Maybe Nvidia, we'll start off with to see what's going on, bit of a recap on Nvidia. Yeah, and maybe we'll do Google and TSMC and the like.

• 29:12Speaker 02

  Yeah, for sure. I mean, I've got Nvidia up now. If you want me to, I can have a look at it. It's down, it's down over the last, since May, Nvidia has been down 20% as of yesterday.

• 29:27Speaker 02

  Is it the worst fall that Nvidia has seen over the last four, five years? No, in 2022, Nvidia fell 66%. In 2024, it fell 41% or 43%. And so in 2025, October, it fell 20%. So this is nowhere near, you know, the big falls that Nvidia has seen. It's where we're only, like I mentioned, since May, we're only down 19%. So what's interesting is that.

• 30:05Speaker 02

  When I look at Nvidia from a big picture gradient on, you know, a monthly timeframe, one thing that stands out to me is the moves up are getting shorter.

• 30:17Speaker 01

  Hmm.

• 30:17Speaker 02

  And that sometimes is a precursor to a top. Um, you look how strong from March twenty three to November twenty four, the run was fantastic. I mean, the, the market ran up um one thousand percent. You look at the low from May twenty five to the October twenty five before twenty percent correction. It went up one hundred and thirty percent, so a tenth of that. And recently, before this sell off, we only went up forty percent. So we're almost halving um in, in, in how strong we're rising and getting a bit heavier on the, on the downside. And whilst I would say on the, on the big picture, on the monthly, we're still in trend.

• 31:01Speaker 02

  Uh, what's going to decide for me, uh, a break below, I guess, a hundred and seventy or even a hundred and sixty?

• 31:10Speaker 01

  Hmm.

• 31:11Speaker 02

  Would then really you've got to start to consider, mate, have we printed a top for Nvidia? Um, before we see a deeper correction, but.

• 31:20Speaker 01

  Hmm.

• 31:21Speaker 02

  Yeah.

• 31:22Speaker 01

  Yeah, possibly down to that one forty mark where until it hits that earlier momentum, right? From when it started rising from twenty twenty three.

• 31:30Speaker 02

  Yeah. Yeah, it, it doesn't look, it doesn't look like a hype stock at the moment. That, that's a positive.

• 31:35Speaker 01

  Hmm.

• 31:35Speaker 02

  Like, I don't think we're in, in hype right now. Um, it's really matured, so I, that, that is a positive, I think, but.

• 31:43Speaker 01

  Yes.

• 31:44Speaker 02

  But, but the, the highs getting smaller and, and halving in terms of that. And you're seeing a lot of compression around the highs. Hmm, I'm not loving what's going on around these levels.

• 31:53Speaker 01

  Yeah, yeah, I'm the same. And I think if it does break that, that momentum that it's, it's established from that low of twenty twenty five, uh, it's just touching it right now. Yep, and then it breaks that one sixty like you mentioned, then yeah, a hundred and forty would probably be, be that next one. Um, now there's, there's one that's very similar in a similar space. It's a Micron Technology. This is one that got um a lot of hype lately. So this is a hype stock like you mentioned that Nvidia is not. This one is the.

• 32:25Speaker 02

  Epitome of hype.

• 32:26Speaker 01

  Opposite of that, epitome of hype. But have a look at what's happened lately.

• 32:31Speaker 02

  Yeah, and normal, I mean. Very normal, you you you go up like this, expect to come down the same way. Um, and you know, for for anyone listening, April, March twenty sixth, the price was three hundred and thirty two.

• 32:50Speaker 02

  April, May, June, in four months, it got to one thousand two hundred and fifty in terms of the price for the high. Uh, to get from literally ten dollars, or what what was the low, three dollars. To get from around three dollars to three hundred dollars. So to move up three hundred points, it took, what, oh, seven to twenty twenty six, you know, or over twenty years. And then in four months, it went quadrupled from three hundred to twelve hundred. So, yeah, I think this is very normal. Expected, um, but again, I I think the big thing with these stocks, if you're someone who's buying and holding.

• 33:32Speaker 02

  Man, you've got to have some, you've got to have a really strong thesis on what what your outlook is, because like you said. For me, that would only be trading stocks, all of these, like, I would have to trade these short to medium term, because you, no one knows what's coming in five years. They offer great volatility, great opportunity, but they reverse just as hard. So if you're going to be long term in these. Expect all your paper profits to be wiped at some point. Um, I just don't think it's the right approach to be thinking or trying to project long term. Who knows?

• 34:02Speaker 01

  Um, um, yeah, exactly, especially with all these developments coming out, it's moving really, really fast. Uh, so if you had that opportunity to get out at that top, then, yeah, definitely, I would have taken it for sure. Uh, the next one is TSMC, but it's uh, it's listed in the US, ticket code T S M. Now, this one, it has also gone quite parabolic. They all seem to have taken off from the April low, April twenty twenty five low. And that one from the low, it reached a high of two hundred and fifty five percent. But this is a very mature company. It's not like Micron that just came out and it was just a, you know, kind of like the the the next. Um, the next flavor in in in in the whole mix.

• 34:45Speaker 01

  This one is actually just come back to trend. It hasn't fallen as much, so. I think that this one is actually looking better than the rest to to be fair. The only thing that I would say is that if it does keep falling, like it has taken out that low of July seventeenth of July twenty twenty six, it has taken that out, which is not very good. I suspect that maybe that the next support is at around three hundred and fifteen, say to three hundred and twenty dollars. If it doesn't hold three hundred and twenty, well, I mean, the first thing would be to hold this momentum. If it doesn't hold this momentum that that is established since that low in April twenty, April twenty twenty five, sorry.

• 35:31Speaker 01

  Then we're going down to that three hundred and twenty. If we do break three hundred and twenty, then the next levels that I'd be looking for is around two hundred and fifty. And then all the way back down to around that two hundred dollar. But I can't see it really falling that much. I think that TSMC is still a very critical company. And I can't see them, their market share being taken out anytime soon, even with that news of China.

• 36:00Speaker 02

  Hmm. I mean, for me, the big thing that stands out, just visually looking at price at the moment. And I know percentage terms, it's not as much as in in previous as where prices was lower. But visually, this is the strongest down move in July twenty twenty six that we have seen. When you measure the volatility of things.

• 36:22Speaker 01

  Hmm hmm.

• 36:23Speaker 02

  Right?

• 36:23Speaker 01

  Very sharp. Yeah.

• 36:25Speaker 02

  And long.

• 36:26Speaker 01

  Yeah, yeah, true.

• 36:28Speaker 02

  And and that is something to. Yes, volatility has increased generally since April twenty twenty five, that is for sure. But even if you factor in the volat- the increased volatility from April twenty twenty five on a monthly basis, this is still the longest move in one month. And it's it's pointing at the low. So it's not just. To me, it doesn't look like just selling. It's fast and it's

• 36:55Speaker 01

  Yep.

• 36:55Speaker 02

  It's long, it's more than anything else since April. That's what has me a little bit concerned.

• 37:02Speaker 01

  Yep.

• 37:04Speaker 02

  If the pullback, if we do end up, I mean, we've still got, what, one day actually, geez, the month might be over. Uh, tomorrow for us. So in two days, if this, if this looks the way it looks now for July, opened at four sixty and closing on the lower at around three seventy five. Hmm. It better hold that momentum line like you said at three forty because if it doesn't, even if it does, watch what the buyers do next. That's, that's what I'll be thinking because after a move like that, if we get weak buying, that tells me that this, this is serious and it looks serious right now. So, um, I, I'd, um,

• 37:42Speaker 02

  yeah, I'd be watching this, this one closely.

• 37:44Speaker 01

  Yeah, yep. That, that bar, that certain bar, and we do cover these types of bar reversal signals uh, in our course, uh, notably in, in module five, where you can see those reversal signals happening and that, that signal, what you were talking about, Phil, uh, with that opening high and closing low and just where it is in relation to the previous bar. Yeah, that definitely looks like a, a pretty, uh, heavy, um, reversal at the moment.

• 38:10Speaker 02

  Yeah, and, and we'll find out soon, uh, you know, what that means.

• 38:14Speaker 01

  Yep, we sure, sure will. Um, uh, now let's just cover one more because we did touch on Google earlier.

• 38:22Speaker 02

  Oh, yes, yes.

• 38:23Speaker 01

  So the good old Goog.

• 38:26Speaker 02

  Google.

• 38:26Speaker 01

  Uh, yeah, good old Google. Let's see what's, I mean, it's Alphabet, uh, so Alphabet Inc. A ticket code G double O G L.

• 38:36Speaker 02

  Short term.

• 38:37Speaker 01

  Because they came out. Short term, you reckon that there's a, there's a trading opportunity here?

• 38:43Speaker 02

  Yeah, a- anything short term. Here like this, the way it looks, big picture, for me, I'm keeping it safe and just going short term. That's all I'll say.

• 38:51Speaker 01

  Right. It, it actually does look a little bit more mature than the rest. Like it touched that momentum and now it looks like it's reversing.

• 38:58Speaker 02

  Because let's say we get a move up in, in, um, August, and then we fail to take out the all time high, and then we start moving back down again. That's going to create something. In terms of what you know, and I don't know, you know, you know what I'm talking about. That could, that could be a serious market top. So. Yeah, short term for me, this, this stock right now.

• 39:26Speaker 01

  Yeah, short term up to three eighty.

• 39:28Speaker 02

  Mate, it's gone from one twenty, one twenty to four hundred bucks in, in a year. Like, come on.

• 39:33Speaker 01

  Yeah, yeah, yeah, for sure. All right, maybe just one more, one more, because we've got to give everybody their money's worth. Microsoft, M S F T, because this is a, a, one that also has been spending heavily. And I say this for a reason, because this is one that. Yeah, exactly.

• 39:56Speaker 02

  That's what, that's what we were worried about before on the one previous. This is looking a lot more into that.

• 40:04Speaker 01

  If it breaks at three sixty, then it's a pattern that you're talking about.

• 40:08Speaker 02

  Yeah, and that's not great.

• 40:11Speaker 01

  That's not great. The, the fact that it didn't break, it, it failed to break above that four hundred and sixty. Uh, and it's now struggling a little bit. If it breaks below that three sixty, then not looking very good. It's looking very toppy.

• 40:23Speaker 02

  Oh, yeah, yeah.

• 40:25Speaker 01

  Yeah, a lot more volatile than the rest. So. Uh, there you have it, guys. I mean, out of the stocks that we covered, it wasn't that many, but uh, they're all in that, in that space that, that we were talking about. And none of them are looking very good. There's definitely better opportunities elsewhere. If, if, if you wanted to look for, for, for trades. It doesn't matter that you love A I, you're using it every day. Don't fall in love with the story. Look at the price action. This is what we do and uh, you know, doesn't mean that you can't use it.

• 40:53Speaker 02

  Yeah, look, mate, you, you, you're in the market to, to profit and, and it's one thing riding. Waves and riding, uh, you know, massive themes like A I has been. But you've got to a- accept that regardless of the theme, regardless of the wave. There will be a beginning and there will be an ending. And just like the dot com bubble, if you're in at the wrong time, you're going to get creamed. Um, and so, yeah, I think.

• 41:22Speaker 02

  Tread with caution when you see, you know, vertical moves that have been going on for five, six years because history says they don't, they don't last regardless of what you might hear in, in the media and in the news. And there are so many opportunities out of the market, even like, and I'm not necessarily saying you have to go and look for beat up sectors or stocks. There are plenty, but when they're doing what Microsoft's doing right now, you'd wanna be cautious more, more than not. And like SpaceX, I couldn't tell you how many, how many people, like, we went out, put our, you know, on the line. I remember even talking to journalists and they were like, are you sure? I'm like, yeah, this, it doesn't make sense. And I wasn't, we weren't the only one, or, you know, there were others that were saying

• 42:07Speaker 02

  it too, but there weren't that many. Everyone was like, oh, the best IPO in history. Oh, it's gonna be amazing. You should have a slice for your kids of a space company. And it's like, for what? For what? You, you're gonna put a relic on your wall and go, look at me, I'm great. I own a piece of SpaceX. Mind you, you've lost the 20 grand that you've invested in it because now it's trading well below the IPO price. And what are you doing this for? Like, and, and then there'll be the people out there will say, oh, yeah, but I saw the other day, Wall Street was saying, oh, you know, we're valuing SpaceX as an eight hundred dollar company. And, and they measured the, the top big banks on Wall Street and they went, the range went from eight hundred to one hundred and thirty. So

• 42:48Speaker 02

  that tells you about, that tells you about the confidence in what each, each place thinks about SpaceX. But if you're, you know, yeah, good luck. If that's what you wanna do, go for it, mate. You know, wait 20 years, but that's not what we're in this game for. We're in this game to, to capture the momentum, ride the opportunity and walk away with a profit. That really, why else are you doing this?

• 43:15Speaker 01

  Exactly right. Exactly. Well said. So in saying that, thank you, everybody for listening. I hope that you got some good value out of that. We enjoyed bringing it to you and we're looking forward to, um, to next week or the next podcast when we bring you some more topics for you to consider. So if you enjoyed it, please give us a five star review. Cheers, Phil.

• 43:38Speaker 02

  Thank you, mate.

• 43:38Speaker 01

  And we'll see you on the next one. Bye for now.

• 43:42Speaker 00

  This podcast is brought to you by Wealth Within, a global leader in stock market education. For more information on our courses, head over to wealthwithin.com.au. Please note that the information in this podcast should not be considered personal financial advice.