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AI Jitters Recast Tech as Software Slumps and Chips Rally

Record retail inflows into software ETFs signal selective opportunities despite disruption fears.

Overview

  • Anthropic’s new Claude/Cowork plug-ins heightened disruption worries and helped trigger a sell-off that erased roughly $1 trillion in software-related market value within a week.
  • Investors rotated toward AI infrastructure, lifting semiconductor benchmarks and Nvidia shares, reinforcing a two-speed market that favors chips and data-center suppliers over many software names.
  • Vanda Research data reported by Reuters showed a record $176 million one‑month net inflow into the iShares Expanded Tech-Software ETF, with retail dip-buying extending to mega-caps including Amazon.
  • JPMorgan and Morgan Stanley said the pullback looks sentiment-driven and flagged opportunities to add higher-quality, AI-resilient software such as Microsoft, ServiceNow, Palo Alto Networks, CrowdStrike and Datadog.
  • Hyperscalers’ 2026 capex plans near $650–$660 billion support demand for AI hardware even as spending scrutiny rises, with Nvidia still backed by buy ratings such as Bank of America’s $275 target.