Palantir stock: Software stocks rallied as the AI ​​chip stock story faded

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Amid an apparent market rotation out of the semiconductor sector, software stocks rallied on Thursday Palantir (PLTR), Sales force (CRM), Data Dog (DDOG), (MNDY) and beating Snowflake (ice) among the beneficiaries. With Thursday's gains, Palantir stock is up about 47% in 2024 while Salesforce stock is down 4%.


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Semiconductor stocks have outperformed software companies as plays on artificial intelligence.

“Looks like a cyclical trade,” TD Cowen analyst Derek Wood said in an email. has moved on. Yesterday/today we've seen a bit of a snapback with it starting to move around a bit. Back to software on best-selling terms.”

gave iShares Expanded Tech Software Sector ETF ( IGV ), an industry index, is likely to turn in a strong performance for the month of June after rising over the past six trading sessions.

A Jefferies report said, “Our flows today and over the course of this period are showing clear signs of a turnaround: real profit-taking in semi/AI (artificial intelligence) names and the first signs of real demand in software. ” “It's no secret that software exposures are historically low while semi exposures are high and this extreme move reflects the pain of that comfort.”

With Thursday's gains, the IGV index is up about 10% in 2024 versus the Nasdaq Composite's roughly 21% advance. The stock bellwether of artificial intelligence Nvidia ( NVDA ) traded down 1.9% on Thursday, hitting 123.99.

Shares of the AI-chip maker have retreated from an intraday high of 140.76 set on June 20. Nvidia stock is still up 149% in 2024.

Meanwhile, the Invesco PHLX Semiconductor Sector Index fell 0.6 percent to 5,421 on Thursday. That's down about 7 percent from its 52-week high of 5,792.

Software Stocks: AI Hype

The IGV Software Index has tumbled 59% in the past year as AI stocks rumble.

But application software makers in the enterprise market have struggled to monetize new generative AI products and services. High interest rates have also weighed on software stocks.

In the stock market today, Palantir stock closed up 4.7 percent at 25.22. Salesforce stock rose 4 percent to 252.85. Snowflake stock rose 3.7 percent to 133.92.

Despite Thursday's gain, SNOW stock is down 32% in 2024. Snowflake is facing stiff competition from privately held Databanks.

Meanwhile, Data Dog stock rose 4.3 percent to 128.45. Service Now (NOW) The stock climbed 2.7% to 774.13. rose 2.6 percent to close at 236.28.

The IBD computer software-enterprise group is ranked No. 109 out of 197 industry groups tracked by IBD.

Follow Reinhard Krause on Twitter. @reinhardtk_tech For updates on artificial intelligence, cybersecurity and cloud computing.

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