Semi Stocks Rally Hard While Software Margins Get Crushed
Semiconductor demand is off the charts because
➡️Hyperscalers investing on the back of insane growth in AI demand
➡️AI (Claude Code & Codex) is growing rapidly because it's insanely valuable for coding
➡️Software companies are in an AI-powered arms race to build more/better software
❌BUT software revenue growth is unimpressive and profits are under pressure because of AI costs and no pricing power because...anyone can make anything
❌AND software stocks are down big in 2026
For this multi-trillion dollar buildout to be worthwhile, the end customer has to be growing and making $$$.
I know "we're doing more with AI" sounds great, but does that translate to "we made more money because of AI?"
Is it possible this is all a house of cards?
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