Sell Chips, Buy Software Trade Reemerges as Tech Stocks Shift Amid Volatility
Wall Street ended a volatile week with mixed performance on Friday, as semiconductor stocks continued their July decline amid doubts about AI-driven demand. The Dow rose nearly 0.4%, while the Nasdaq lagged due to weakness in chipmakers like Micron and Intel. In contrast, software companies such as Salesforce saw gains after securing major contracts, including a $1.6 billion deal with the U.S. Department of Veterans Affairs. The shift from hardware to software is part of an ongoing trend where investors rotate capital within tech sectors rather than exiting entirely. Despite strong Q2 results, Intel fell nearly 6%, while Salesforce rose over 4%. Analysts noted that while large government contracts are positive signals, they may not be enough to reverse broader concerns about slowing growth and AI disruption. Meanwhile, geopolitical tensions involving oil prices and Trump’s tariff threats added uncertainty for traders. However, a reported push by Pakistan toward U.S.-Iran peace talks offered some relief in energy markets.
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Topics: oil prices semiconductors software stocks stock market