--- title: "If AI crushes software, why is \"AI leader\" NVIDIA dragged down by software stocks?" description: "The panic of \"AI defeating software\" is triggering indiscriminate selling in the market: on one hand, there is a bet that AI will disrupt the software industry, while on the other hand, chip stocks li" type: "news" locale: "en" url: "https://longbridge.com/en/news/274897070.md" published_at: "2026-02-05T01:37:17.000Z" --- # If AI crushes software, why is "AI leader" NVIDIA dragged down by software stocks? > The panic of "AI defeating software" is triggering indiscriminate selling in the market: on one hand, there is a bet that AI will disrupt the software industry, while on the other hand, chip stocks like NVIDIA that stand to benefit are being wrongly punished. Bank of America analysts point out that this logic is self-contradictory, while also believing that AI capital expenditures will not slow down. The valuation of the chip sector has already factored in concerns about a slowdown in spending or downward revisions in profit expectations, and these concerns "may not materialize." The narrative of AI's impact on the software industry is triggering a round of "indiscriminate" selling, pulling down AI chip stocks represented by NVIDIA, but the logic behind the selling itself has inherent contradictions. On Wednesday, NVIDIA's stock price fell by 3.41%, Broadcom dropped by 3.83%, Micron decreased by 10%, and SanDisk fell over 15%. Meanwhile, the selling pressure in the software sector continued, with the iShares Expanded Tech-Software Sector ETF, IGV, dropping another 1.8% on Wednesday. On Tuesday, Anthropic launched nearly ten tools for its Claude Cowork, advancing AI applications into more scenarios such as sales and data analysis, leading the market to further internalize the narrative that "AI will defeat software" into valuation adjustments. However, the decline in software stocks triggered a broader sell-off, including the AI sector. Bank of America analyst Vivek Arya believes that the decline in chip stocks is illogical. He pointed out that the drop in chips suggests that AI investment returns are deteriorating, while the decline in software indicates that AI adoption will become extremely widespread. These two conclusions cannot coexist, and the current market reaction is excessive. ## **Why the narrative of "AI defeating software" is dragging down AI chips** Vivek Arya noted that the decline in AI-related chip stocks implies a market judgment that AI investments are deteriorating to the point where ideal returns are difficult to achieve, limiting future growth potential; however, the decline in software stocks corresponds to another judgment that AI adoption will become widespread and significantly enhance productivity, to the extent that the business models of software operations and applications will be replaced. **"These two outcomes cannot happen simultaneously."** Arya wrote that this trading structure is similar to the panic during the "DeepSeek shock" in January, which was ultimately proven to lack factual support. At that time, the market was concerned that DeepSeek would create competitive models at lower costs, reducing the demand for expensive high-performance chips. ## **AI investments show no signs of cooling, capital expenditures once far exceeded expectations** Arya believes that after the "DeepSeek shock," the market is seeing more AI spending and accelerated growth in AI tokens. In his report, he stated that cloud capital expenditures are estimated to grow by 69% year-on-year by 2025, far exceeding the initial growth expectations of 20% to 30%. He also emphasized that even though current AI models are performing well, **it may still take years to "prove value" from a productivity perspective, so he does not believe AI investment will slow down in the short term; even if significant productivity breakthroughs occur in the future, models will still need continuous improvement to maintain user engagement, and investments may not necessarily decline.** His conclusion is that, although it is impossible to determine the final shape of the software industry, **the chip industry has already benefited and will continue to benefit from the AI construction cycle,** adding that enterprise AI adoption is still in its early stages, and more sovereign nations are beginning to increase their AI investments Arya also pointed out that **the valuation of the chip sector has already factored in concerns about a slowdown in spending or downward revisions in profit expectations, and these concerns "may not materialize."** ## **Why Nvidia is "dragged down," what investors should look for** From a trading perspective, this round of decline resembles a "narrative-driven correlation shock": as the market simultaneously sells off software, betting on the AI substitution effect, it also sells off AI chips, betting on deteriorating AI investment returns, making core AI assets like Nvidia susceptible to being sold off during position liquidations and risk reassessments. For Nvidia investors, what needs to be clarified in the short term is whether the current **price fluctuations stem from substantive changes in AI capital expenditures and demand, or from indiscriminate de-risking across sectors triggered by the "AI defeating software" narrative.** ### Related Stocks - [SOXL.US - Direxion Semicon Bull 3X](https://longbridge.com/en/quote/SOXL.US.md) - [SOXX.US - iShares Semiconductor ETF](https://longbridge.com/en/quote/SOXX.US.md) - [NVDA.US - NVIDIA](https://longbridge.com/en/quote/NVDA.US.md) - [NVDU.US - Direxion Daily NVDA Bull 2X Shares](https://longbridge.com/en/quote/NVDU.US.md) - [SMH.US - VanEck Semiconductor ETF](https://longbridge.com/en/quote/SMH.US.md) - [NVDL.US - GraniteShares 2x Long NVDA Daily ETF](https://longbridge.com/en/quote/NVDL.US.md) - [XLK.US - Spdr Select Tech](https://longbridge.com/en/quote/XLK.US.md) - [NVDX.US - T-Rex 2X Long NVIDIA Daily Target ETF](https://longbridge.com/en/quote/NVDX.US.md) - [07788.HK - XL2CSOPNVDA](https://longbridge.com/en/quote/07788.HK.md) - [07388.HK - XI2CSOPNVDA](https://longbridge.com/en/quote/07388.HK.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | AMD 與 Meta 簽 5 年 AI 晶片訂單 股價升近 9% Meta 可買最多 1.6 億股 AMD | Meta 與 AMD 達成為期五年的合作協議，Meta 將購買 AMD 最新的 AI 晶片，算力最高達 6 吉瓦，交易價值超過 1,000 億美元。同時，Meta 可分階段購買最多 1.6 億股 AMD 股票，AMD 股價因此上漲近 9%。 | [Link](https://longbridge.com/en/news/276821466.md) | | 英偉達今夜財報大考：要多強才能扭轉 AI 泡沫恐慌？ | 要扭轉市場對 AI 泡沫的擔憂，英偉達不僅需要在營收和利潤上大幅超出預期，還必須在現金流兑現、利潤率維持以及未來訂單指引上給出無懈可擊的證明，以安撫對科技巨頭債務驅動型支出感到緊張的投資者。 | [Link](https://longbridge.com/en/news/276887894.md) | | 英偉達這周的財報會很好，但投資者更關心 3 月 GTC 大會 | 英偉達將於 2 月 25 日美股盤後發佈季度財報，市場預期營收 661 億美元、每股收益 1.54 美元。分析師普遍樂觀，但認為亮眼數據未必推動股價上漲，真正催化劑或在三月 GTC 大會釋放。今年英偉達股價漲幅僅約 2%，遠遜於費城半導體指 | [Link](https://longbridge.com/en/news/276830031.md) | | Gitterman Wealth Management LLC 收購了 4,297 股英偉達公司 $NVDA | Gitterman Wealth Management LLC 在第三季度將其在 NVIDIA Corporation 的持股增加了 109.7%，額外購買了 4,297 股，總持股達到 8,214 股，價值 153 萬美元。其他機構投資者 | [Link](https://longbridge.com/en/news/276716473.md) | | 英偉達第四季度預覽：華爾街迫切需要好消息——這家人工智能巨頭能否帶來令人滿意的結果？ | 英偉達將在週三公佈其第四季度財報，分析師預計收入為 656.4 億美元，每股收益為 1.50 美元。Wedbush 分析師 Dan Ives 認為，英偉達的業績對科技行業至關重要，可能在近期下滑中提供一些緩解。他預計英偉達將超出預期，並給出 | [Link](https://longbridge.com/en/news/276780175.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.