Software Sector Surges as AI Arms Race Escalates Further
The Mag7 stocks collectively posted positive returns last week, but internal divergence was significant. META Platforms and Microsoft led gains, while Tesla fell against the trend.
The core contradiction lies in the escalating AI capital expenditure arms race, with Amazon tripling its NVIDIA GPU orders to support its expanding robotaxi supplier network. This intensifies the market's focus on AI, but also raises doubts about valuations and return cycles.
The software sector rebounded strongly, led by names such as Salesforce, ServiceNow, and CrowdStrike. In contrast, the hardware side showed clear signs of retreat from highs. Semiconductor equipment and storage saw sharp pullbacks, while AI application names collectively surged.
The market breadth narrowed last week, with the S&P 500 hitting new highs but largely supported by a few heavyweights. Microsoft's revenue from OpenAI reached $24.1 billion, but investors still cannot see key profit-sharing details of the partnership.