Market Recap 06/29 – 07/03
Meta says it will sell its excess AI compute, the compute-scarcity trade unwinds, memory and neocloud stocks get hit double digits while software rips. Plus a weak jobs report, Bitcoin off the lows, and Trump pumping Micron.
The Setup
Correction, or rotation? After the week the AI trade just had, that's the only question that matters. Midweek, Meta broke the news that it will start selling its excess AI compute to outside customers — and the entire AI hardware trade is underwritten by scarcity. The selloff started in the neocloud compute providers and spread down the stack, feeding a rising 'bottleneck fatigue': bears argue the trade is overcrowded, semis are pushing 20% of the S&P 500, and capital is flowing out of the sector as a whole — the great rotation.
What the AI Found
- 1.Meta confirmed it will sell excess AI compute to outside customers, cracking the compute-scarcity assumption underwriting the AI hardware trade.
- 2.The damage was layered: chips barely moved (NVDA +0.5%) while everything downstream bled — memory (MU -13.6%, SNDK -16.5%), photonics (COHR -12.1%), neoclouds (IREN -20.1%, CRWV -16.9%, NBIS -13.5%), and AI power names (CEG -10.3%).
The Trade
This is a weekly market recap, not a trade. Sections cover the Meta excess-compute story, the memory selloff, the SaaS rotation, the Bitcoin rebound, and the Trump/Micron episode.
The Result
Money rotated out of AI hardware into software while a weak June jobs report reset Fed expectations and Bitcoin reclaimed $60K off the 200-week moving average.
The Prompt
Give me a recap of this week's market. What drove the semiconductor selloff, where did the money rotate, and what are the key levels and catalysts to watch next week?