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“Another blog post on software vs semiconductors. Dude, we get it, Software is dead and Semis are mooning. Give it a rest, next topic.”
You have a point, and I promise I wouldn’t belabor the subject if I didn’t have some killer charts to share with you.
This is a topic that we often discuss on our shows at The Compound (and for good reason). The dynamic between these two groups over the past year has truly been unprecedented.
But first, let me set the table. How did we get here?
Here’s the journey of Software vs Semis since 1991.
Jan, 1991 —> the beginning of the journey (where my data starts)
Both software and semis trade together for nearly 35 years
Oct, 1999 —> I am born. Not relevant to the story, but a plug for myself.
Oct, 2025 —> The Saaspocalypse begins aka Claude gets cracked out (that means it got really good in Gen Z-Speak).
Feb, 2025 —> Citrini Report released. Investors lose their minds. I sell my IGV. It marks the low.
So that, in a nutshell, is how we got here.
Table set?
Okay. Next chart.
Below I’m showing you two ratio charts.
The top pane shows the ratio in news article mentions of the terms “AI” vs “Software”
There are now 6.4x the mentions of “AI” in articles than “Software”
The bottom pane shows the ratio between the market cap size of Semis (my proxy for “AI”) vs the Software Industry.
And lastly, maybe the most important part of the chart, a vertical line that marks the launch of ChatGPT
Take a look at the chart. It might take a second to understand. There’s a lot going on. Take as long as you need.
Okay, now that you’ve had a look, can we agree that ChatGPT was the start of all of this?
I don’t know about you, but that vertical line looks like a launch point to me.
And a launch point for Semiconductor returns as well.
Check this one out, recommended to me by Michael.
So far in 2026, Semis have outperformed Software by an average of 0.47% per day. That’s 415% annualized but who’s counting?
The bar is nearly extending out of the bounds of the chart. We may need to extend that Y axis if this continues. Insane.
Last one.
The correlation between Software and Semis is essentially nonexistent now.
Michael and Josh are going to provide more color on these visuals on tonight’s all new edition of What Are Your Thoughts? at 5PM EST.
The doc is packed. Don’t miss it! Again, 5PM EST and LIVE!
Ben’s New Book
Ben is out with a brand new book called “Risk & Reward.”
I helped Ben with the charts for the book, and the data he’s compiled within the 50+ charts/tables alone makes it worth purchasing a copy.
You can click the image below or CLICK HERE to grab your copy. I got my copy last Friday and already finished (not because I’m a fast reader), but because I simply couldn’t put it down. Trust me, the book is amazing.
That’s all for today. Thank you so much for reading and I hope everyone has a great weekend.