Software stocks have regained investor attention after months of pressure tied to AI fears, with a widely followed software index advancing 2.2% this month, reducing its year-to-date decline to 12%, while the Philadelphia Stock Exchange Semiconductor Index dropped 12% in July despite being up 78% this year. Bob Doll, chief investment officer at Crossmark Global Investments, noted the gap between chips and software had become extreme and said he has been adding software exposure while cutting semiconductor holdings. Guggenheim upgraded Salesforce, ServiceNow, and Check Point Software Technologies, arguing the most bearish views on the sector may be overstated, and HSBC raised Adobe to buy from hold, saying investors may overestimate damage from AI-based design products. Sentiment toward chip stocks has become more cautious: Samsung Electronics delivered a strong earnings report that did not trigger a rally, and a Reuters report that China's DeepSeek is developing its own AI chip helped pressure the semiconductor index by 4.7%. Investors are also weighing stretched AI infrastructure spending expectations after Bloomberg News reported Meta Platforms plans to sell access to its cloud operations, amplified by Michael Burry's reported short positions in Nvidia, Applied Materials, and the iShares Semiconductor ETF, even as semiconductor earnings are still expected to grow 47% in 2027, compared with 16.5% expected growth this year for software and services.