The Market Ear
Report published May 15, 2026
One of Tech's Biggest Rotations Is Brewing: Semis vs. Software
The Market Ear · May 15, 2026
The market is seeing extreme positioning divergence between semiconductors and software, with software heavily underowned despite improving fundamentals. A rotation from the crowded semis trade into software appears imminent, supported by record-high short squeeze risk in software.
Read the remaining 2 pages
Finvaulta summarizes The Market Ear's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Key Takeaways
- 1.An extreme positioning dislocation exists between 'crowded' semiconductors/AI hardware and 'hated' software.
- 2.Software short squeeze risk has reached the 100th percentile relative to the past six years.
- 3.Improving fundamentals in software (accelerating growth and margins) are being ignored by the market, setting up a potential rotation.
Table of Contents
- Crowded Semis, Hated Software
- The Jaws gap
- Shorts
- Play semis downside
- IGV
- IGV upside
Report data
The Jaws gap
| Metric | Estimate | Context |
|---|---|---|
| Software Short Squeeze Risk | 100 Percentile | Risk vs historical positioning over the last 6 years. |
| IGV Resistance/Trigger Level | 92 USD | Price level that could re-ignite the squeeze. |
Access the full report
And others from the leading tier 1 banks.
Free account: read previews and a daily allowance of full reports. Pro removes the daily limit.