Hedge funds 'doubling down' on AI are fleeing software stocks: Goldman

Oh, marvellous. Goldman Sachs has confirmed that the smart money is 'doubling down on AI' by fleeing software stocks faster than a politician caught in a scandal. Semiconductor weight is at a record high, while software is nursing its lowest allocation since 2019. Because nothing says 'betting on the intelligence revolution' like dumping the very companies that build the applications, and piling into the companies that just make the rocks you heat and etch. It's the investment equivalent of buying shares in a bakery because you love bread, but refusing to buy the bakery itself.

The logic, apparently, is that the real value is in the hardware — the shovels, not the gold. But this is Goldman Sachs we're talking about, a firm that has historically been wrong about almost everything at exactly the worst moment. Remember when they advised clients to buy subprime mortgages in 2007? Good times. So now they're telling hedge funds to pile into semiconductors and dump software, which is basically a bet that AI will never need to actually run anything useful — just exist as a potentiality in a server farm. Bold strategy, Cotton.

And what of the software engineers who were told their jobs were safe because 'AI is just a tool'? Well, if the market is already rotating out of software, the message is clear: the AI revolution eats its own. First the applications, then the people who write them. But don't worry — Jensen Huang says blaming AI for job cuts is 'lazy.' So when Goldman's next report shows a record high in semiconductor weight and a record low in software employment, it'll just be a coincidence. Clink. 🍻