The rise of Nvidia and AMD stocks is slowing down. Will software stocks start to pick up soon?

Although Nvidia's stock price had risen by about 20% over the past 3 trading days, it is slightly down in Wednesday morning's trading. As a result, the company's attempts to achieve a market capitalization of 3 trillion dollars and surpass Apple in the market capitalization rankings have failed. Apple's stock price is up by about 1%.

On Wednesday, the decline in the semiconductor sector, as stated by analyst Jordan Klein veru inc, who works at Mizuho's desk, appears to be the result of a significant increase in trading on Tuesday following a period of sustained rotation and trading throughout the year. What Mr. Klein is trying to convey is that funds are flowing from software stocks to semiconductor stocks, especially those related to artificial intelligence.

There have been some significant revenue reports from companies like Okta and Salesforce, etc. However, Mr. Klein noted that the recent 'response to the improvement in consumer software revenue' has not led to a shift towards small and medium-sized growth software stocks.

Another factor that could potentially impact the software industry is the U.S. inflation report for April, to be released on Friday, which could affect interest rate trends.

"Therefore, software investors are more likely to make significant defensive moves rather than aggressive ones, as they are concerned that cautious, disappointing, or negative news could cause further outflow of funds," said Mr. Klein.

"With the focus on AI, persistent inflation in the USA services sector, and uncertainty in corporate earnings until 2025, it seems to me there is a possibility that software may not regain enough momentum to lead the high-tech industry by the second half of 2024," Klein wrote.by the second half of 2024 as Mr. Klein wrote.