20% Nasdaq Crash Just Months Away; Investor Reveals Top Shorts | David Woo

David Woo, CEO of David Woo Unbound, discusses his bearish outlook on technology stocks and the AI trade. He predicts that the NASDAQ will decline 20% once signs emerge that the AI capex spending story is ending, likely triggered by disappointing Q2 earnings guidance from Microsoft, Amazon, Google, and Meta in late July. Woo argues that while the AI trade benefited from significant capex spending by hyperscalers, the fundamental problem is that companies like OpenAI and Anthropic cannot monetize their models due to regulatory constraints and competitive pressures from Chinese startups. He notes that Anthropic's Mythos model, while technically impressive with recursive learning capabilities, has become restricted due to national security concerns, limiting commercial viability. Meta's announcement to enter cloud computing signals that the company has overinvested in chips and cannot achieve expected returns, marking the first major admission from a hyperscaler of failed AI ROI. Regarding semiconductors, Woo explains the market rotation from training chips (Nvidia) to inference chips (AMD, Intel, Broadcom) to high-bandwidth memory chips (Samsung, Micron, SK Hynix). He anticipates memory chip price declines once new capacity comes online later in 2026. On gold, Woo contends that rising real yields—driven by a stronger US economy boosted by the AI bubble and positive wealth effects—have been gold's primary headwind. Once the AI bubble bursts and economic growth slows, he expects the Fed to cut rates, real yields to fall, and gold to stage a significant rally similar to the post-dot-com era. Woo also analyzes geopolitical developments, particularly the US-Iran conflict, arguing that the US failed to achieve military objectives despite spending $1 trillion annually on defense. He cites satellite imagery revealing Iran retained 70% of its missile capabilities after the conflict, representing a strategic loss for American hegemony. He criticizes Trump's Iran nuclear deal as a foreign policy disaster that cedes ground to China and Iran without meaningful concessions. Woo notes internal fractures in the Trump administration between hawks like Marco Rubio and doves like JD Vance, with the leaked release of $6 billion in frozen Iranian assets signaling American capitulation. He expects oil prices to rise once geopolitical tensions resume, as Iran may withdraw from negotiations if frozen assets aren't immediately released. On Bitcoin and crypto, Woo argues Trump is uninterested in Bitcoin itself but rather stable coins pegged to the dollar, as they support dollar hegemony and incentivize purchases of US treasuries. He predicts minimal cryptocurrency legislation will pass given low Republican enthusiasm and expected midterm losses. Woo's core investment thesis centers on two asymmetric trades: long oil and short NASDAQ, with additional positions in long 5-year treasuries and short 30-year treasuries (a steepener bet), all predicated on the AI bubble bursting in H2 2026.