Happy Sunday. QQQs grinded out another win on the week, but lots of dispersion underneath the hood. Semis were down 4% and software up 4%.
Last week, we thought the setup for semis looked healthier. Despite expecting dispersion, we saw a clearer path for select names to work as several broad narrative overhangs shifted in the bulls’ favor: frontier ARR, the open-source/frontier gap, sentiment around the power-supply gap, and the next use case beyond coding. Charts were looking better, too.
That was a big whiff.
The first half of the week went well, but with leadership concentrated in semis heading into the week, rotation into software/internet began taking hold midweek as rates bottomed. Thursday’s “Great OpenAI Gross-to-Net Panic of 2026” accelerated the shift. We don’t think the $70B → $50B gross-to-net realization materially changed the narrative (see our Thursday EOD wrap for the glass-half-full vs. glass-half-empty takes), but it added doubt at the margin and reminded investors how…