I would avoid treating a day or two of price action as confirmation of a lasting rotation.
If softer labour data ultimately supports Fed rate cuts, both AI hardware and software could benefit. Hardware names also tend to be more cyclical and volatile, so sharp pullbacks are not unusual after strong rallies.
Rather than switching wholesale, I would prefer a balanced approach:
Keep core exposure to quality AI infrastructure if the long-term demand for compute and memory remains intact.
Add selectively to software and platform leaders where earnings growth justifies valuations.
Wait for the NFP report and upcoming earnings before concluding that capital has permanently rotated away from hardware.
A durable rotation should be confirmed by fundamentals and earnings, not just a few sessions of market leadership.
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