Technology (XLK) rocked again yesterday, led by semiconductors and hardware, but software (IGV) made another strong move, as it continued to try to shake off fears of an artificial intelligence (AI) disruption.

AI-adjacent industries and names continue to see serious action, including GE Vernova (GEV), which posted a strong earnings and guidance report. And here comes Bitcoin (BTC).

Sock It To Me, Baby!

The Semiconductor Index (SOX) has now rallied 16 sessions in a row, and looks a little exhausted as the Relative Strength Index (RSI) is at 80, and the rate of change (ROC) appears to have peaked.

Chips are the linchpin to the AI ‘Picks and Shovels’ story, and there are several chapters to go from here. So, be ready after the next pullback. You always say you will, but too many people panic instead of buying dips.

Yesterday was all about growth and momentum.

Soft Underbelly

It looks as if the Software (IGV) bounce will reverse back to selling after the ServiceNow (NOW) earnings release after the bell last night. IGV failed at this very spot after the first attempt to climb off the canvas. And even though the exchange-traded fund (ETF) had an extremely high rate of change, it was plunging.  Last night was a huge test.

One summary I received last night was generated by artificial intelligence, and I didn’t know whether to laugh or cry.

TSLA

Tesla (TSLA)  reported a nice beat, but the initial bounce evaporated as Elon Musk laid out big plans for massive capital expenditures (CapEx) spending. The $25.0 billion will help names, such as Intel (INTC) and others.

The company is a shell of its former self, and I suspect there will be more rumors of selling off parts to fit into SpaceX.

Memory Story

When an industry has pricing power like this, the underlying share prices tend to have charts to match.  Memory has been crushing it even as doubters keep saying it's only temporary, things keep getting better.

SK Hynix reports another monster quarter:

• Revenue $35.6B vs Est. $35.1B

• Operating Profit $25.4B vs Est. $24.6B

• EBITDA $28.0B vs Est. $27.8B

Q2 Guidance:

• DRAM guided up ~8% QoQ

• NAND guided up ~15% QoQ (including Solidigm)

CapEx is expected to increase significantly versus last year.

Keep an eye on Micron Technology (MU) and Sandisk (SNDK).

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