One Of Tech’s Biggest Rotations Is Brewing

Crowded Semis, Hated Software

The positioning dislocation between semis and software remains extreme. Investors continue crowding aggressively into semis and AI hardware while software positioning remains heavily depressed despite improving fundamentals, accelerating growth, and expanding margins.

Software remains one of the few major AI-adjacent groups still heavily underowned. If semis finally start losing momentum, the unwind of one of the market’s most crowded trades could quickly fuel a violent rotation into software.