Markets
Salesforce and Adobe Rose 4.6% Each While Chip Stocks Fell Again
On October 15 software stocks staged their best day in weeks — Salesforce and Adobe +4.57%, Oracle +3.00%, the software ETF +1.81% — while Nvidia, AMD and Intel kept falling. Inside technology, money was choosing sides.
Technology is usually treated as one trade. On Thursday it split in two. Salesforce rose 4.57% to $246.74 and Adobe 4.57% to $251.67, both to their highest closes in about a month. Shopify added 3.27%, and Oracle recovered 3.00% to $134.47 after an 8.83% drop the day before. The iShares software ETF, IGV, gained 1.81%.
The chipmakers went the other way. Nvidia fell 1.84% to $217.23, AMD 1.50% and Intel 2.80% on 147 million shares, its second heavy loss in a row. The VanEck Semiconductor ETF lost 1.04%, its eighth straight decline. The technology sector ETF, which holds both groups, ended 0.65% lower — the chip losses outweighed the software gains.
Part of the explanation is rates. The 10-year Treasury yield fell to 5.09% and the 30-year had its biggest drop since February, which helps companies whose value depends on profits far in the future. Software firms with recurring subscription revenue fit that description; so do homebuilders and online platforms, and Home Depot (+4.31%) and Airbnb (+4.32%) rose too.
The other part is where the AI risk sits. This week's worries — CoreWeave's debt, circular deals between chipmakers and their customers, the cost of data centres — fall on the companies building AI capacity. Software companies are, for now, buyers of that capacity rather than lenders to it. Even so, both Salesforce and Adobe remain down for the year, Adobe by about 28%.
One day of rotation is not a trend, and Thursday's software bounce came after weeks of selling. But a sector rising on the same day its neighbour falls is a useful test of relative strength: if software keeps holding up on the days chips sell off, the market is drawing a line between the two that it has not drawn all year.