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SEMI · T16

Will the PHLX Semiconductor Index (SOX) total return exceed the iShares Expanded Tech-Software ETF (IGV) total return over the period 2026-01-01 to 2027-09-30?

Bottleneck rent at the silicon layer keeps semiconductor equity returns ahead of software equity returns through the AI capital cycle.

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Margin migrates to chips and power

Capital floods into AI build-out faster than the supply chain can add capacity, concentrating pricing power and incremental profit at chip, packaging and memory chokepoints while software faces AI disintermediation and multiple compression. Semiconductor equities re-rate relative to software equities over the window, a market-level signature of profit-pool migration downstack to upstack. Because these supplier stages are small relative to total AI spending, a single order is material to them, reinforcing the concentration.

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IGV outperforms SOX as application value wins

No means IGV's total return exceeds SOX's total return over the 2026-01-01 to 2027-09-30 window. This would show first if the infrastructure build-out phase gives way, as it did with railroads, electrification and the internet, to non-technology sectors reorganizing around AI and capturing the value themselves through application-layer products. It would also show if enterprises keep shifting spending toward providers chosen for product execution, cost efficiency and credibility rather than raw infrastructure, letting software capture more of the gain than chips.

2 voices

The questions

  1. Settles Nov 18open

    Did Nvidia's revenue for the quarter ending October 25, 2026 grow at least 82 percent from a year earlier?

  2. Settles Nov 18open

    Did Nvidia's revenue for the quarter ending October 25, 2026 grow at least 91 percent from a year earlier?

  3. Settles Nov 18open

    Will Nvidia's revenue for the quarter ending October 2026 be at least 101% higher than a year earlier?

  4. Settles Nov 12open

    Did Applied Materials's revenue for the quarter ending October 25, 2026 grow at least 38 percent from a year earlier?

  5. Settles Nov 12open

    Did Applied Materials's revenue for the quarter ending October 25, 2026 grow at least 50 percent from a year earlier?

  6. Settles Nov 12open

    Did Applied Materials's revenue for the quarter ending October 25, 2026 grow at least 60 percent from a year earlier?

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