Which chipmakers are benefiting from this shift?

Companies like AMD, Intel, and Micron are seeing increased demand for their AI and data center chips.

Is this shift permanent?

It's too early to tell, but it reflects a change in investor preference for chipmakers' rapid growth over software's stable revenue.

Wall Street Flees Software Stocks for Triple-Digit Chipmaker Rally

Wall Street is rotating out of software stocks into semiconductor companies, with the iShares Expanded Tech-Software Sector ETF falling about 20% from its record high, while chipmakers see triple-digit gains.

July 2, 2026

1 min read

Source: TheStreet

Key Numbers

software etf decline

20% below record high

In a notable shift on Wall Street, investors are moving away from software stocks—once considered the safe bet in artificial intelligence—toward semiconductor companies that are experiencing a boom.

Reasons for the Shift

Software stocks were favored for their recurring subscription revenue, but that trade has unraveled. Meanwhile, chipmakers like AMD (AMD), Intel (INTC), and Micron (MU) are seeing surging demand for their chips used in data centers and AI applications.

Sector Performance

The iShares Expanded Tech-Software Sector ETF (IGV) is trading about 20% below its all-time high, reflecting waning confidence in software names. In contrast, semiconductor stocks have posted triple-digit percentage gains, attracting growth-focused investors.

What This Means for Investors

This rotation is reshaping tech investment priorities, with chipmakers' high returns outpacing software's stable revenue. However, investors should watch for elevated valuations and sector volatility.

Frequently Asked Questions

Because the software ETF has fallen about 20% from its peak, while chipmakers are delivering high returns due to AI chip demand.

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This article was rewritten in Wrqti's editorial style based on information from the original source above. Content is informational only — not investment advice.