Nasdaq slides into correction as China's chip catch-up unsettles Wall Street's AI bet

When the industry's biggest companies spent 2026 pouring hundreds of billions into AI infrastructure, every valuation assumed the West's lead in advanced chipmaking would hold for years. That assumption cracked this week. CXMT, China's memory-chip maker, staged a blockbuster public listing that showed the country closing the gap in advanced memory production far faster than most Western analysts had modelled, and the shock rippled straight into the Nasdaq. The tech-heavy Nasdaq 100 opened 28.07.2026 roughly ten percent below its June peak — a formal correction — as Micron and AMD led a fourth straight day of chip-sector losses. Investors are now openly questioning whether the industry's AI capital spending will generate the returns priced into its shares, a doubt sharpened rather than eased by the same week's earnings: Meta showed AI plugging directly into a $150-billion-plus advertising engine, while Microsoft leaned on cloud backlog that will take quarters to convert into revenue. The result is a market groping for reassurance at the exact moment its central technological bet is being tested by a rival it had priced out of contention. Bloomberg's markets desk called it the week Wall Street stopped assuming the AI chip race was America's to lose.