📈 AI Is Crushing Software — Here's What Smart Money Is Doing Instead

What you need to know before you trade this week.

🚨 AI Is Crushing Software — Here's What Smart Money Is Doing Instead

This week, the S&P might look quiet… but don’t be fooled. Under the hood, massive rotation is underway.

If you only look at price, you’ll miss it.

Here’s what’s really happening—and what it means for your trades this week 👇

---

📉 1. Software Is Breaking Down—Hard

The biggest story? Software is getting smoked.

AI agents from AWS and Anthropic are already replacing enterprise SaaS platforms like Salesforce and Workday. One major company outright ended its contracts, citing internal AI as a better alternative.

This isn’t theoretical disruption. It’s happening now—and markets are pricing it in.

---

📊 2. AD Line Divergence: It’s Not the Market, It’s the Sector

The Nasdaq 100’s advanced decline line is diverging sharply.

At first glance, it looks like market breadth is weakening… but dig deeper and it’s clear the damage is concentrated in software. The rest of the market is holding up—or even breaking out.

Breadth looks bad because of sector-specific rotation, not a systemic breakdown.

---

🛒 3. Amazon Sales Flopped—but the Stock Rallied Anyway

Amazon’s Prime Day sales were down 41% YoY.

Yet $AMZN is up—why? Because of AI. Specifically, AWS is launching an AI agent marketplace next week, powered by Anthropic.

That’s what the market is rewarding—not retail, but AI infrastructure dominance.

---

🔁 4. Rotation Is Real and It's Accelerating

We’re seeing clear rotation into:

• Semiconductors (SOX) – breaking out

• Regional banks (KRE) – gaining strength

• Bitcoin – classic cup & handle breakout

• Power/infra names ($VST, $VRT) – grinding higher

Meanwhile, software (IGV) is rolling over as valuations come under pressure.

---

⚠️ 5. Software Valuations Are in Danger

Investors are starting to reprice SaaS companies—fast.

The thesis is simple: if AI agents can replicate core SaaS functionality, then existing valuations are too high. Even strong names like Oracle aren’t immune from a PE compression cycle.

This is a structural shift in perception, not a temporary sell-off.

---

🔍 6. What to Watch This Week

Keep these key events on your radar:

• $TSM + $ASML earnings – barometers for AI infrastructure demand

• $XBI & $KRE – potential new leadership emerging

• Cloud vs. Semis – huge divergence forming under the surface

We're at the front edge of a sector reshuffle—and the smart money is already positioning.

---

🔌 7. Power Names: Quiet Strength in a Loud Market

AI won’t disrupt power—it’ll demand more of it.

Names like $VRT and $VST are quietly grinding higher. These are your picks & shovels for the AI revolution.

It’s not sexy, but it’s working.

---

🧠 Final Takeaway

The market isn’t topping—it’s evolving.

Yes, software is cracking. But capital is flowing into semis, infrastructure, and regional banks. The signs of a healthy rotation are all there… if you know where to look.

---