Tech Sector Shift: Chips Soar, Software Sinks; What's Next for Investors?

• Market rotation is occurring within the technology sector, with money shifting from software to semiconductor stocks.
• The VanEck Semiconductor ETF (SMH) has reached new all-time highs, showing a 140% gain in nine months, mirroring its 2020-2021 rally.
• The iShares Expanded Tech-Software Sector ETF (IGV) has fallen to its lowest level since April 2025, exhibiting a bearish 'head-and-shoulders' pattern.
• Unlike previous rallies, the current semiconductor strength is broad-based, not solely driven by Nvidia (NVDA).
• Despite IGV's severe underperformance, its oversold status and historical patterns suggest a potential bounce or stabilization in relative strength against SMH.

Why It Matters: Semiconductors are surging while software struggles, but a potential relative bounce for software is on the horizon.