Jul. 30 at 2:52 PM
Still confused as to why software stocks (
$ADBE,
$CRM,
$TOST, etc.) have been moving in almost the exact opposite direction of the Mag 7 and semiconductor stocks.
The supposed AI threat to SaaS hasn't really been proven yet. At this point, there's still a lot of uncertainty around whether it will actually happen, which companies would be affected, and over what timeframe. In fact, several software names have recovered quite well from their lows.
So why does it seem that whenever one sector rallies, the other sells off dramatically? The divergence feels extreme, especially considering that many software companies remain profitable, generate strong cash flow, and could ultimately benefit from AI rather than be disrupted by it. Weird. I guess it's good for portfolio diversification, but it still feels odd that the market keeps treating software and AI infrastructure as mutually exclusive winners.
