Deutsche Bank Backs Software as Hedge Against $750 Billion AI Spending and Chip Volatility
Updated
Updated · CNBC · Aug 3
Deutsche Bank Backs Software as Hedge Against $750 Billion AI Spending and Chip Volatility
3 articles · Updated · CNBC · Aug 3
Summary
Deutsche Bank said software can help cushion portfolios from semiconductor volatility, arguing a 50-50 software-chip mix delivered better risk-adjusted returns than a pure semiconductor basket this year.
AI jitters are rising as investors question whether massive spending is producing enough revenue: Meta, Amazon, Google and Microsoft have invested about $1.1 trillion since early 2023 and are expected to spend $750 billion this year.
Cloud-heavy hyperscalers are still being rewarded for turning AI investment into sales, with Amazon, Microsoft and Google accelerating cloud growth, while Apple and Meta shares have fallen.
Nvidia and memory makers Samsung, SK Hynix and Micron remain seen as essential to the AI buildout, but analysts warned the tightly linked AI ecosystem could amplify any disruption.
Software has regained favor after the March 'SaaSpocalypse' sell-off, with short positions easing, and Deutsche still prefers the sector as a diversifier even after ending its outright overweight call.