Semiconductor Sell-Off, the Software Rotation, and Why Meta's Cloud Move Isn't What It Looks Like

Semiconductor and memory stocks have pulled back sharply while software names stage a quiet comeback, is this just healthy rotation, or the start of something bigger? 

Puru Saxena, founder of AlphaTarget and growth investor, is joined by AlphaTarget's analyst team to unpack the sharp fifteen percent pullback in the SOXX semiconductor ETF against a ten percent rally in the IGV software ETF, why the team continues to hold roughly 15-20% in cash after recently locking in partial profits, and why they expect the next three to four weeks to stay choppy amid ongoing volatility out of the White House. 

Damia breaks down the capital rotation out of overbought semiconductor names and into infrastructure software, monitoring, and security stocks, and explains why rising memory prices are creating margin pressure across parts of the AI supply chain while leaving connectivity players largely unaffected. 

Anirban Mahanti explains why horizontal and "boutique" SaaS software remains vulnerable to AI disruption, while companies building durable data moats and network effects around orchestration, observability, and multi-cloud management are positioned to compound that advantage over time. 

Oyvind Bjerke discusses the escalating competitive landscape in fast inference, comparing Groq and Cerebras' SRAM-based architectures against Qualcomm's newly unveiled Dragonfly platform, and explains why the decode stage of inference is so memory-bandwidth constrained, and how Cerebras' wafer-scale approach solves SRAM's historical capacity problem. 

Irnest Kaplan walks through Morgan Stanley's hyperscaler capex forecasts, why growth is expected to nearly halve from 79% in 2026 to 39% in 2027, and why Meta's newly announced cloud compute business is a less alarming development than the market's initial reaction suggested. 

The episode also covers why fast inference may become more valuable, not less, as AI workloads bifurcate between on-device and cloud processing, how AlphaTarget's portfolio has returned roughly 65% since launching two years ago versus the S&P 500's 39%, and why the team is taking a short break over the summer before returning later this year. 

 

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