To The Moon

Now everyone’s asking the same question: why did software stocks get hammered so badly yesterday, even when the broader market was rebounding? And why is money flowing into hardware but avoiding software? My take is simple — the market is reacting to fear. xAI just dropped a very powerful model, and suddenly it’s like Thanos snapped his fingers on software stocks. The narrative becomes: if AI can do everything, what’s the point of traditional software? So people sell first, think later. This fear isn’t new. It’s always been there. The recent optimism was just a pause — now we’re back to doubting software again. But let’s be clear: this selloff is not rational. Look at the data: $iShares Expanded Tech-Software Sector ETF(IGV)$ Software ETF IGV: ~-5% intraday, worst drop since 2023 SaaS index: ~-40% YTD Meanwhile: Earnings: still fine Profit forecasts: still going up 2027 growth expectations: revised higher But valuations collapsed to ~20x vs ~34x historical. So fundamentals up, prices down. That’s sentiment, not reality. Now here’s where it gets interesting — and where most people are missing the bigger picture. Everyone is chasing “AI infrastructure winners”. $NVIDIA(NVDA)$ Names like NVIDIA and newer players like CoreWeave are being treated as if their growth is guaranteed. $CoreWeave, Inc.(CRWV)$ Let’s talk about CoreWeave for a moment. On the surface, it looks like the perfect AI story: Revenue growth: +400%+ Backlog: tens of billions Massive deals with hyperscalers Pure-play GPU cloud Even recently, it secured multi-billion dollar deals with companies like Meta to supply AI compute capacity So the market says: “This is the future.” But dig one level deeper. CoreWeave is: Highly leveraged Burning cash Spending $30–35B capex to keep up Still loss-making despite explosive growth It’s basically a capital-intensive infrastructure bet. Even worse: Heavy customer concentration (e.g. Microsoft historically dominant) Growth depends on a few giant buyers continuing to spend So the real question is: 👉 If downstream doesn’t make money, who pays CoreWeave? $Oracle(ORCL)$ Now compare that with Oracle. Market says: Oracle = “old software” CoreWeave = “AI infrastructure future” But reality is almost the opposite. Oracle today: Cloud infrastructure already >50% of revenue Profitable Strong cash flow RPO (backlog) in the hundreds of billions CoreWeave: Smaller scale Negative earnings Massive debt + capex Backlog looks big, but comes with execution risk Even CoreWeave’s backlog (~$25–60B range depending on period) is growing fast, but still far smaller and riskier compared to Oracle’s contracted visibility Here’s the irony: The market is pricing: CoreWeave → like a premium infrastructure winner Oracle → like a declining software company That’s a mismatch. Because structurally: CoreWeave = high growth, high risk, high capital intensity Oracle = moderate growth, high profitability, strong visibility Yet valuations don’t reflect that difference properly. $Microsoft(MSFT)$ Same story with Microsoft. People are ignoring the fact that: It owns both infrastructure (Azure) AND downstream applications It monetizes AI directly through software While CoreWeave depends on others to monetize AI. Now step back and think bigger. The AI value chain must eventually balance: Upstream (chips, infra) Midstream (cloud) Downstream (software, apps, users) Today: Upstream margins = very high Downstream = being questioned But this cannot last. Because if software doesn’t make money: 👉 Infrastructure demand collapses 👉 And companies like CoreWeave feel it first So what we’re seeing now is a classic early-cycle distortion: Hardware = over-earning Software = over-feared But long term, both must win. My conclusion: Software stocks are being oversold, while some infrastructure names are being over-assumed. CoreWeave is a great company, but it also highlights the risk: 👉 Growth without profitability 👉 Demand dependent on a few big buyers 👉 Heavy capital requirements Meanwhile, companies like Microsoft and Oracle: 👉 Already profitable 👉 Already embedded in the AI stack 👉 Already monetizing So if you’re holding software names, this is probably not the time to panic. If anything, this is where patience matters most. Because in every cycle: 👉 The market chases what looks strongest today 👉 And misprices what will matter tomorrow Just remember: Don’t go all-in Size properly Build gradually The real money is made when perception and reality reconnect. @TigerObserver @TigerPM @Tiger_comments @TigerStars @Daily_Discussion