Software stocks may benefit from the AI displacement trade's complete reversal through 2026: instead of AI supposedly displacing traditional software companies, software companies could potentially displace the AI trade itself. x.com 

Software valuations are at 10-year lows, with a forward PEG ratio of 1.43 that is cheaper than the S&P 500's, which looks enticing unless software is truly dead. The software ETF is at a key crossroads, still below a bearish trendline in place since October despite a 3% Friday gain; a direct breakout would likely complete the bottoming phase, though it could still pull back to form a fuller inverse head and shoulders. x.com  x.com 

The iShares Expanded Tech-Software ETF is an unappealing way to own software, even with a long-term bullish view on the sector. AOTS has outperformed it because its holdings are actually profitable and have higher revenue and earnings growth. x.com 

The iShares Expanded Tech-Software ETF is signaling a mid-term uptrend reversal. The last volatility hole marked the bottom and a first buy signal, and whale accumulation has risen steadily to 69.4%; a trend-reversal candle gave the second buy signal. Momentum bars at 90-92 act as key support, with resistance at $108.5 and $116. x.com 

Software stocks look set to benefit as the market signals that open-weight models will help software and that AI extinction risk was overblown, with AI instead a net positive for growth and margins in coming years. The cloud software ETF is becoming one of the best-looking charts in the market and is close to clearing $37 resistance and a volume shelf. x.com 

Snowflake and Palantir could spark a reversal in software because they benefit from AI yet sit inside a heavily shorted software ETF. Many hedge funds run long-semis, short-software-ETF trades, and because the ETF is not weighted purely by market cap, smaller names absorbed a lot of short selling and were pushed very low. Snowflake and Palantir carry high weights, so strong results from them could easily blow up the ETF's shorts and turn the sector. x.com 

Institutions are massively accumulating software stocks for the long term, absorbing every new low while price sits at potential resistance. A $9 million-plus call sale at next month's $100 strike and VIX call buying show them hedging a possible rejection at prior highs. If resistance breaks, that buying could fuel the largest software rally ever seen; losing the $102.70 accumulation level would be the next step down. x.com  x.com  x.com  x.com 

Strong AI demand and hyperscaler spending make the selloff a mid-cycle correction despite neocloud financing stress. Widening CCC spreads expose leveraged firms to higher borrowing costs; US competition with China supports AI buildout. The base case is a bottom in roughly 5-7 days, then stabilization and eventually a broader reversal, though some projects may fail and valuations compress. IREN, Cipher, Nebius, Applied Digital, Micron, AMD, ASML and Intel are worth gradually accumulating. x.com 

Software stocks have a massive bull behind them: $20 million went into calls on the sector, and that bet is off to a strong start. x.com 

Compute demand is not diminishing, as SPCX's call, numbers and guidance make clear. The call and guidance are big enough to restart the AI rally into tech earnings season. AI stocks should rally tomorrow barring macro bobbles; earnings will determine what follows. x.com  x.com