📉 NOWHERE TO HIDE: The AI Selloff Is Spreading
Investors rotated from chip stocks into software, hoping to find a safer corner of the technology market. Friday showed why that strategy may no longer work.
🔻 Friday’s selloff:
• 💻 Software ETF (IGV): -4.8%
• 🔌 Semiconductor ETF (SOXX): -4.1%
• ☁️ Twilio (TWLO): -10.6%
• 🏢 Oracle (ORCL): -5%
• ⚙️ ServiceNow (NOW): -4%
• 📊 Salesforce (CRM): -2%
💡 What’s really changing?
Previously, investors could rotate between chipmakers and software companies as market conditions changed. Now, both sectors are vulnerable to the same concern: Are today’s technology valuations justified by tomorrow’s earnings?
If investors begin questioning the returns on AI spending, chipmakers could face pressure from reduced infrastructure expectations, while software companies could suffer if businesses slow technology spending or demand clearer evidence of productivity gains.
This doesn’t mean AI is finished. It means investors may be becoming more selective about which companies can turn technological progress into sustainable profits.
🎯 What I’m watching next:
1. Earnings growth versus current valuations.
2. Whether AI spending translates into measurable customer demand.
3. Which companies can maintain strong cash flow during a market downturn.
📊 Your take: If both chipmakers and software stocks keep falling together, where would you look for the next opportunity — profitable tech leaders, beaten-down growth stocks, or sectors outside technology?
Sharing this perspective for discussion purposes only, not financial advice.
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- jollyfo·10-19 12:12IGV and SOXX both down over 4% means the rotation trade is breaking. This looks more like valuation air coming out than sector-specific weaknessLikeReport