- NVDA
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Yahoo Finance Senior Business Reporter Ines Ferre and Zacks Investment Management chief market strategist Brian Mulberry analyze the moves in semiconductor and software stocks after recent warnings about AI’s rapid development shook markets on Monday.
we are seeing now that tech is under pressure for a second day in a row, but it’s really the semiconductor space that’s been under pressure. I’m going to pull up the Y-Fi interactive so we can just take a look at that for a second because there is something that is that we have been seeing. This is the software space under pressure today. Uh we are seeing the semiconductors that are actually popping right now. Um the Nasdaq 100, the Mag 7, a little bit under pressure. Nvidia though, up 1%. Yesterday we had seen that it was down.
But I do want to note that we have been seeing a divergence when it comes to semis and when it comes to software today excluded really. But if we look at a three-month chart, take a look at where software stocks are at three months from of three months ago and you’ll see the gains in software. Meanwhile, in the semiconductor space, you are seeing that those have been under pressure for the last three months. So, this software sort of uh uh apocalypse that we have been talking about earlier in the year where you
saw software names really coming under pressure, that has not come into fruition. In fact, you you’re seeing some of these software companies that have been able to use AI that have been able to incorporate it into their platforms, into their offerings, able to monetize off of it. And that’s why you’ve seen that over the last three months, you’ve seen a pop in some of these software stocks and also cybersecurity stocks included in that as well, where you’re seeing the street really bullish on cybersecurity stocks because all these AI agents
need cybersecurity.
One of the things that was greatly overstated earlier this year was the death of software. What we’re finding is in order to engage with these AI tools, whether they’re agentic or just large language model driven, you need software to customize those tools for your business in particular. Salesforce is a great example of this where they’ve kind of gone in and sharpened those tools and customized them in a very specific way that makes them easier to use for smaller businesses that don’t necessarily have the capital.
The other thing, as you were talking about cyber security, is you also need that layer of protection. Some of these AI models have reached in to proprietary data and taken it back to the model because that’s what they’re trained to do is go out and find information and bring it home so that it can train for the next iteration of the next model. And you’re going to need some form of cyber security to make sure that you’re protecting your own intellectual property. That means that software is still very viable in this moment and it’s going to be a necessary component
of what your AI stack is going to look like.
