Technology shares could drop as much as 75% from peak levels, warns market strategist Gareth Soloway, based on patterns seen in past tech booms. The alert focuses on the semiconductor and memory chip sectors, which have shown early signs of weakness amid the AI-driven rally.
Signs of a Broader Market Correction
Soloway highlighted that the recent downturn in memory and semiconductor stocks reflects a market shift toward anticipating excess supply and weakening demand about a year ahead. This shift follows record gains fueled by heavy investment in artificial intelligence infrastructure. Companies are now trying to lower costs and optimize current memory stockpiles after a period of high prices.
Memory-chip giant Micron Technology (NASDAQ: MU) exemplifies this trend, falling roughly 36% from its all-time high despite reporting strong earnings. This decline stirs fears that the semiconductor selloff could deepen if AI demand projections cool.
Historical Perspective and Future Outlook
Drawing parallels with prior transformative technology cycles like the internet boom, Soloway emphasized that significant valuation corrections are common after major innovations trigger optimism. He expects intermittent rebounds but maintains the longer-term risk leans toward sharp declines approaching 75% for semiconductor stocks.
While short-term rallies may occur, the strategist urges caution as markets look beyond current AI spending surges toward fundamental industry changes. The debate continues over whether recent memory stock weakness signals a normal consolidation or something more severe.
This is an informational analysis and not financial advice.
