The David Lin Report Market Top Alert: Is 40% Crash Next? Trader Reveals Why He’s Short | Gareth Soloway
Nov 18, 2025
Gareth Soloway, Chief Market Strategist at Verified Investing, shares his insights on the potential for a market top and a 10-15% correction, attributing risks to the bursting AI bubble. He examines the vulnerability of semiconductors, warning their downturn could affect the broader market. Discussions also cover Bitcoin's resistance levels, underperformance compared to tech, and predictions for gold, anticipating a pullback before reaching new highs. Gareth emphasizes caution for new investors and the importance of risk management.
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AI Stocks Drove Most Recent S&P Gains
- Gareth Soloway says AI stocks drove 75% of the S&P's upside over two years and have carried the market higher.
- He warns valuations price in years of future revenue, indicating the market pulled forward much upside.
Circular Financing Masks Fragile AI CapEx
- Gareth explains deals between AI firms and chipmakers can act like circular financing that props prices up artificially.
- He highlights halted data centers and power constraints as signs that AI capex may slow down.
Semiconductor Valuations Look Historically Stretched
- Gareth shows SMH reached ~102% above its 200-week moving average, similar to prior extreme peaks.
- He expects a sizable semiconductor correction because price tends to snap back toward the moving average.