Software isn’t collapsing — it’s undergoing a forced repricing. IGV is down 17% YTD vs QQQ as AI disruption drives a heavy rotation.
This dislocation is creating asymmetric setups among mispriced software survivors, which we outline in this report.
We also highlight emerging energy opportunities and a hidden Western-listed proxy for ByteDance’s AI-driven growth in China.
Stay through to the end for key public portfolio updates — now up +23.5% vs QQQ since July 2025.
Key Report Insights:
AI Repricing Shock: Software de-rating opens selective alpha
Earnings Reality: 79% SPX beats reinforce profit-driven bid
Policy Torque: $12B uranium stockpile shifts supply dynamics
Vertical Integration: CCJ captures fuel → reactor value chain
CapEx Supercycle: China + Western hyperscaler spending drives AI infra
1. Market Overview:
A. The Emerging Market Leaders:
Emerging markets are gaining momentum into 2026, outperforming developed peers as commodity scarcity and earnings inflection drive returns.
YTD leaders include South Korea — powered by semiconductor and memory strength — and Brazil, led by energy and base metals.
Source: Mike Zaccardi on X
B. It’s Earnings Season:
Despite elevated volatility, the S&P 500 remains positive (+1.91% YTD) as earnings season gains momentum.
So far, 79% of companies have beaten estimates — reinforcing the rally with tangible profit strength rather than sentiment alone.
Source: Duality Research
2. Software:
A. The Software Reversion:
Software has underperformed QQQ over the past year and is down another 17% YTD as AI pressures market share and compresses margins.
Tools like Claude Code are commoditizing coding, enabling non-technical users to build without deep expertise.
Despite valid concerns, depressed valuations may create mean-reversion opportunities among companies still delivering solid growth.
B. Long Expertise, Short Enterprise:
Catching a software bottom is high risk; a long/short approach offers better risk-adjusted exposure.
Long: ADBE — GenAI acts as a complement to its creator ecosystem, positioning AI as an upgrade rather than a replacement. Growth remains intact: Q4 2025 revenue hit a record $6.19B (+10% YoY), FY2025 cash flow exceeded $10B, and forward P/E sits at 11.55.
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