{ "generatedAt": "2026-10-22T18:36:31Z", "url": "https://deepstack.ltd/theses/semis-outperform-software-through-2027/", "disclaimer": "Analysis and opinion, not investment advice.", "id": "semis-outperform-software-through-2027", "number": 50, "question": "Will the PHLX Semiconductor Index (SOX) total return exceed the iShares Expanded Tech-Software ETF (IGV) total return over the period 2026-01-01 to 2027-09-30?", "dek": "Bottleneck rent at the silicon layer keeps semiconductor equity returns ahead of software equity returns through the AI capital cycle.", "family": "T16", "subthesis": "T16.03", "sector": "AI.SEMI", "subsectors": [ "AI.SEMI.GPU", "AI.SEMI.FOUNDRY", "AI.MEM.HBM", "AI.DC.CAMPUS" ], "relatedParts": [ 12 ], "approvedAt": "2026-10-22T01:56:07Z", "sectorName": "Semiconductors & Compute Silicon", "api": "https://deepstack.ltd/api/v1/theses/semis-outperform-software-through-2027.json", "sides": [ { "id": "yes", "label": "Margin migrates to chips and power", "summary": "Capital floods into AI build-out faster than the supply chain can add capacity, concentrating pricing power and incremental profit at chip, packaging and memory chokepoints while software faces AI disintermediation and multiple compression. Semiconductor equities re-rate relative to software equities over the window, a market-level signature of profit-pool migration downstack to upstack. Because these supplier stages are small relative to total AI spending, a single order is material to them, reinforcing the concentration.", "voices": [ { "name": "Conestoga Capital Advisors LLC", "entity": null, "claim": "Chipmakers and capital equipment providers serving AI infrastructure demands significantly outperform software companies, which face slower enterprise IT budgets, elongated sales cycles, and cautious spending by smaller businesses. Software has…", "date": "2026-08-22", "url": "https://fiscal.ai/fund-letters/conestoga-capital-advisors-llc-q3-2025-fscl_document_3SQR8VZE589" }, { "name": "Moses Sternstein", "entity": "https://deepstack.ltd/people/moses-sternstein/", "claim": "The AI infrastructure wave demands physical infrastructure and hardware to operationalize AI capabilities, shifting investor and market attention from software-only to hardware and infrastructure companies. This rotation is reinforced by defense…", "date": "2026-06-26", "url": "https://www.a16z.news/p/charts-of-the-week-cycles-different" }, { "name": "Artisan Partners", "entity": "https://deepstack.ltd/people/artisan-partners/", "claim": "Expanding AI capabilities sent software shares tumbling as investors reassessed business models, competitive positioning and long-term monetization potential. At the same time, leadership within AI shifted toward infrastructure-oriented segments…", "date": "2026-03-31", "url": "https://fiscal.ai/fund-letters/artisan-partners-q1-2026-fscl_document_8HSZ6QGJ438" }, { "name": "Diamond Hill Capital Management", "entity": null, "claim": "As companies and governments invest in AI infrastructure, demand for semiconductors and hardware supporting that buildout rises, lifting pricing and valuations for companies positioned in the supply chain. Market performance becomes concentrated in…", "date": "2026-03-31", "url": "https://fiscal.ai/fund-letters/diamond-hill-capital-management-q1-2026-fscl_document_3YUM9WDG380" }, { "name": "Third Point", "entity": null, "claim": "AI applications like Anthropic's legal and financial analysis tools undermine the historical competitive advantages of capital-light software businesses, prompting investors to question moat sustainability and high-margin structures.…", "date": "2026-02-06", "url": "https://fiscal.ai/fund-letters/third-point-q4-2025-fscl_document_4PPJ6ASD833" }, { "name": "Market Sentiment", "entity": "https://deepstack.ltd/people/market-sentiment/", "claim": "When spending overwhelms a stage of the chain, that stage becomes the constraint and captures a disproportionate share of incremental capital; because these suppliers are small relative to the deals, a single order is material to them while…", "date": "2026-01-22", "url": "https://www.marketsentiment.co/p/investing-in-the-age-of-extremes" } ] }, { "id": "no", "label": "IGV outperforms SOX as application value wins", "summary": "No means IGV's total return exceeds SOX's total return over the 2026-01-01 to 2027-09-30 window. This would show first if the infrastructure build-out phase gives way, as it did with railroads, electrification and the internet, to non-technology sectors reorganizing around AI and capturing the value themselves through application-layer products. It would also show if enterprises keep shifting spending toward providers chosen for product execution, cost efficiency and credibility rather than raw infrastructure, letting software capture more of the gain than chips.", "voices": [ { "name": "Vltava Fund", "entity": null, "claim": "Following the historical pattern of railroads, electrification, and the internet, an initial infrastructure build-out phase precedes a later phase in which non-technology sectors leverage the new capability to reorganize their operations and…", "date": "2026-04-01", "url": "https://fiscal.ai/fund-letters/vltava-fund-q1-2026-fscl_document_2MUE7NPC486" }, { "name": "Michael Spencer", "entity": "https://deepstack.ltd/people/michael-spencer/", "claim": "As businesses spend more on AI tokens and evaluate suppliers on product execution and cost efficiency rather than raw model power, enterprises shift spending toward the provider with the best cost structure, product-market fit, and credibility.…", "date": "2026-05-28", "url": "https://www.ai-supremacy.com/p/what-if-there-is-only-one-major-ai-winner-2026-ipo" } ] } ], "tests": [ { "id": "th050-t01", "part": null, "thesis": 50, "slug": "semis-outperform-software-through-2027", "when": "November 18, 2026", "whenLabel": "Nov 18, 2026", "date": "2026-11-18", "precision": "day", "event": "NVIDIA, revenue growth from a year earlier, quarter ended October 25, 2026: whether it comes in at or above 82%.", "status": "pending", "resultId": null, "sameAs": null, "stage": "pre", "callExpects": "yes", "callExpectsBy": "Desk Editor (level B)", "callExpectsAt": "2026-10-22T03:45:00Z", "callProbability": 70, "callProbabilityAt": "2026-10-22T03:45:00Z", "callProbabilityHistory": [], "source": { "kind": "thesis", "ref": "tests[0].date", "url": null }, "resolver": { "kind": "earnings", "symbol": "NVDA", "rule": "Compare the revenue that Nvidia reports for the quarter ended October 25, 2026 with the quarter ended October 26, 2025, in its 10-Q or 10-K filing on SEC EDGAR. The answer is yes if growth is at or above 82.0%; no if it is below 82.0%.", "question": "Did the revenue of Nvidia for the quarter ended October 25, 2026 grow at or above 82.0% from the quarter ended October 26, 2025?", "source": { "label": "SEC EDGAR, XBRL company facts of Nvidia (Forms 10-Q and 10-K)", "url": "https://data.sec.gov/api/xbrl/companyfacts/CIK0001045810.json" }, "ambiguity": "If Nvidia has not filed by December 11, 2026, or a filing restates a period the rule reads, the test is inconclusive, and the Result says what was read and what was missing.", "specState": "approved", "specVersion": 1, "specUpdatedOn": "2026-10-22", "specHistory": [ { "version": 1, "date": "2026-10-22", "reason": "First specification.", "by": "Desk Editor (level B)" } ], "callExpects": "yes", "format": "ladder", "group": "th050-nvda-revenue-yoy", "threshold": 82, "direction": "above", "unit": "%", "think": { "baseRate": "NVIDIA's revenue growth from a year earlier was 105.9% for the quarter ended July 26, 2026, by its filing on SEC EDGAR.", "outsideView": "The year-earlier quarter is not on the same concept in the filings, so the rungs sit on the last print alone.", "wouldChange": "The results-calendar consensus for the quarter ended October 25, 2026 implies 90.9%, and the middle rung is centred there." } }, "url": "https://deepstack.ltd/docket/#test-th050-t01", "storyUrl": "https://deepstack.ltd/theses/semis-outperform-software-through-2027/#tests", "resultUrl": null, "machines": [ { "model": "claude-opus-5", "p": 14, "at": "2026-10-22T03:41:59Z" }, { "model": "deepseek-reasoner", "p": 35, "at": "2026-10-22T03:42:51Z" } ], "readers": null }, { "id": "th050-t02", "part": null, "thesis": 50, "slug": "semis-outperform-software-through-2027", "when": "November 18, 2026", "whenLabel": "Nov 18, 2026", "date": "2026-11-18", "precision": "day", "event": "NVIDIA, revenue growth from a year earlier, quarter ended October 25, 2026: whether it comes in at or above 91%.", "status": "pending", "resultId": null, "sameAs": null, "stage": "pre", "callExpects": "either", "callExpectsBy": "Desk Editor (level B)", "callExpectsAt": "2026-10-22T03:45:00Z", "callProbability": 50, "callProbabilityAt": "2026-10-22T03:45:00Z", "callProbabilityHistory": [], "source": { "kind": "thesis", "ref": "tests[1].date", "url": null }, "resolver": { "kind": "earnings", "symbol": "NVDA", "rule": "Compare the revenue that Nvidia reports for the quarter ended October 25, 2026 with the quarter ended October 26, 2025, in its 10-Q or 10-K filing on SEC EDGAR. The answer is yes if growth is at or above 91.0%; no if it is below 91.0%.", "question": "Did the revenue of Nvidia for the quarter ended October 25, 2026 grow at or above 91.0% from the quarter ended October 26, 2025?", "source": { "label": "SEC EDGAR, XBRL company facts of Nvidia (Forms 10-Q and 10-K)", "url": "https://data.sec.gov/api/xbrl/companyfacts/CIK0001045810.json" }, "ambiguity": "If Nvidia has not filed by December 11, 2026, or a filing restates a period the rule reads, the test is inconclusive, and the Result says what was read and what was missing.", "specState": "approved", "specVersion": 1, "specUpdatedOn": "2026-10-22", "specHistory": [ { "version": 1, "date": "2026-10-22", "reason": "First specification.", "by": "Desk Editor (level B)" } ], "callExpects": "either", "format": "ladder", "group": "th050-nvda-revenue-yoy", "threshold": 91, "direction": "above", "unit": "%", "think": { "baseRate": "NVIDIA's revenue growth from a year earlier was 105.9% for the quarter ended July 26, 2026, by its filing on SEC EDGAR.", "outsideView": "The year-earlier quarter is not on the same concept in the filings, so the rungs sit on the last print alone.", "wouldChange": "The results-calendar consensus for the quarter ended October 25, 2026 implies 90.9%, and the middle rung is centred there." } }, "url": "https://deepstack.ltd/docket/#test-th050-t02", "storyUrl": "https://deepstack.ltd/theses/semis-outperform-software-through-2027/#tests", "resultUrl": null, "machines": [ { "model": "claude-opus-5", "p": 8, "at": "2026-10-22T03:42:56Z" }, { "model": "deepseek-reasoner", "p": 14, "at": "2026-10-22T03:43:23Z" } ], "readers": null }, { "id": "th050-t03", "part": null, "thesis": 50, "slug": "semis-outperform-software-through-2027", "when": "November 18, 2026", "whenLabel": "Nov 18, 2026", "date": "2026-11-18", "precision": "day", "event": "NVIDIA, revenue growth from a year earlier, quarter ended October 25, 2026: whether it comes in at or above 101%.", "status": "pending", "resultId": null, "sameAs": null, "stage": "pre", "callExpects": "no", "callExpectsBy": "Desk Editor (level B)", "callExpectsAt": "2026-10-22T03:45:00Z", "callProbability": 28, "callProbabilityAt": "2026-10-22T03:45:00Z", "callProbabilityHistory": [], "source": { "kind": "thesis", "ref": "tests[2].date", "url": null }, "resolver": { "kind": "earnings", "symbol": "NVDA", "rule": "Compare the revenue that Nvidia reports for the quarter ended October 25, 2026 with the quarter ended October 26, 2025, in its 10-Q or 10-K filing on SEC EDGAR. The answer is yes if growth is at or above 101.0%; no if it is below 101.0%.", "question": "Did the revenue of Nvidia for the quarter ended October 25, 2026 grow at or above 101.0% from the quarter ended October 26, 2025?", "source": { "label": "SEC EDGAR, XBRL company facts of Nvidia (Forms 10-Q and 10-K)", "url": "https://data.sec.gov/api/xbrl/companyfacts/CIK0001045810.json" }, "ambiguity": "If Nvidia has not filed by December 11, 2026, or a filing restates a period the rule reads, the test is inconclusive, and the Result says what was read and what was missing.", "specState": "approved", "specVersion": 1, "specUpdatedOn": "2026-10-22", "specHistory": [ { "version": 1, "date": "2026-10-22", "reason": "First specification.", "by": "Desk Editor (level B)" } ], "callExpects": "no", "format": "ladder", "group": "th050-nvda-revenue-yoy", "threshold": 101, "direction": "above", "unit": "%", "think": { "baseRate": "NVIDIA's revenue growth from a year earlier was 105.9% for the quarter ended July 26, 2026, by its filing on SEC EDGAR.", "outsideView": "The year-earlier quarter is not on the same concept in the filings, so the rungs sit on the last print alone.", "wouldChange": "The results-calendar consensus for the quarter ended October 25, 2026 implies 90.9%, and the middle rung is centred there." } }, "url": "https://deepstack.ltd/docket/#test-th050-t03", "storyUrl": "https://deepstack.ltd/theses/semis-outperform-software-through-2027/#tests", "resultUrl": null, "machines": [ { "model": "claude-opus-5", "p": 6, "at": "2026-10-22T03:43:27Z" }, { "model": "deepseek-reasoner", "p": 7, "at": "2026-10-22T03:43:34Z" } ], "readers": null }, { "id": "th050-t04", "part": null, "thesis": 50, "slug": "semis-outperform-software-through-2027", "when": "November 12, 2026", "whenLabel": "Nov 12, 2026", "date": "2026-11-12", "precision": "day", "event": "Applied Materials, revenue growth from a year earlier, quarter ended October 25, 2026: whether it comes in at or above 38%.", "status": "pending", "resultId": null, "sameAs": null, "stage": "pre", "callExpects": "yes", "callExpectsBy": "Desk Editor (level B)", "callExpectsAt": "2026-10-22T03:45:00Z", "callProbability": 72, "callProbabilityAt": "2026-10-22T03:45:00Z", "callProbabilityHistory": [], "source": { "kind": "thesis", "ref": "tests[3].date", "url": null }, "resolver": { "kind": "manual", "rule": "Compare the revenue that Applied Materials reports for the quarter ended October 25, 2026 with the quarter ended October 26, 2025, in its 10-Q or 10-K filing on SEC EDGAR. The answer is yes if growth is at or above 38.0%; no if it is below 38.0%.", "question": "Did the revenue of Applied Materials for the quarter ended October 25, 2026 grow at or above 38.0% from the quarter ended October 26, 2025?", "source": { "label": "SEC EDGAR, XBRL company facts of Applied Materials (Forms 10-Q and 10-K)", "url": "https://data.sec.gov/api/xbrl/companyfacts/CIK0000006951.json" }, "ambiguity": "If Applied Materials has not filed by December 31, 2026, or a filing restates a period the rule reads, the test is inconclusive, and the Result says what was read and what was missing.", "specState": "approved", "specVersion": 1, "specUpdatedOn": "2026-10-22", "specHistory": [ { "version": 1, "date": "2026-10-22", "reason": "First specification.", "by": "Desk Editor (level B)" } ], "callExpects": "yes", "format": "ladder", "group": "th050-amat-revenue-yoy", "threshold": 38, "direction": "above", "unit": "%", "think": { "baseRate": "Applied Materials's revenue growth from a year earlier was 24.8% for the quarter ended July 26, 2026, by its filing on SEC EDGAR.", "outsideView": "The year-earlier quarter is not on the same concept in the filings, so the rungs sit on the last print alone.", "wouldChange": "The results-calendar consensus for the quarter ended October 25, 2026 implies 51.5%, and the middle rung is centred there." } }, "url": "https://deepstack.ltd/docket/#test-th050-t04", "storyUrl": "https://deepstack.ltd/theses/semis-outperform-software-through-2027/#tests", "resultUrl": null, "machines": [ { "model": "claude-opus-5", "p": 40, "at": "2026-10-22T03:43:42Z" }, { "model": "deepseek-reasoner", "p": 30, "at": "2026-10-22T03:44:10Z" } ], "readers": null }, { "id": "th050-t05", "part": null, "thesis": 50, "slug": "semis-outperform-software-through-2027", "when": "November 12, 2026", "whenLabel": "Nov 12, 2026", "date": "2026-11-12", "precision": "day", "event": "Applied Materials, revenue growth from a year earlier, quarter ended October 25, 2026: whether it comes in at or above 50%.", "status": "pending", "resultId": null, "sameAs": null, "stage": "pre", "callExpects": "either", "callExpectsBy": "Desk Editor (level B)", "callExpectsAt": "2026-10-22T03:45:00Z", "callProbability": 52, "callProbabilityAt": "2026-10-22T03:45:00Z", "callProbabilityHistory": [], "source": { "kind": "thesis", "ref": "tests[4].date", "url": null }, "resolver": { "kind": "manual", "rule": "Compare the revenue that Applied Materials reports for the quarter ended October 25, 2026 with the quarter ended October 26, 2025, in its 10-Q or 10-K filing on SEC EDGAR. The answer is yes if growth is at or above 50.0%; no if it is below 50.0%.", "question": "Did the revenue of Applied Materials for the quarter ended October 25, 2026 grow at or above 50.0% from the quarter ended October 26, 2025?", "source": { "label": "SEC EDGAR, XBRL company facts of Applied Materials (Forms 10-Q and 10-K)", "url": "https://data.sec.gov/api/xbrl/companyfacts/CIK0000006951.json" }, "ambiguity": "If Applied Materials has not filed by December 31, 2026, or a filing restates a period the rule reads, the test is inconclusive, and the Result says what was read and what was missing.", "specState": "approved", "specVersion": 1, "specUpdatedOn": "2026-10-22", "specHistory": [ { "version": 1, "date": "2026-10-22", "reason": "First specification.", "by": "Desk Editor (level B)" } ], "callExpects": "either", "format": "ladder", "group": "th050-amat-revenue-yoy", "threshold": 50, "direction": "above", "unit": "%", "think": { "baseRate": "Applied Materials's revenue growth from a year earlier was 24.8% for the quarter ended July 26, 2026, by its filing on SEC EDGAR.", "outsideView": "The year-earlier quarter is not on the same concept in the filings, so the rungs sit on the last print alone.", "wouldChange": "The results-calendar consensus for the quarter ended October 25, 2026 implies 51.5%, and the middle rung is centred there." } }, "url": "https://deepstack.ltd/docket/#test-th050-t05", "storyUrl": "https://deepstack.ltd/theses/semis-outperform-software-through-2027/#tests", "resultUrl": null, "machines": [ { "model": "claude-opus-5", "p": 5, "at": "2026-10-22T03:44:15Z" }, { "model": "deepseek-reasoner", "p": 5, "at": "2026-10-22T03:44:30Z" } ], "readers": null }, { "id": "th050-t06", "part": null, "thesis": 50, "slug": "semis-outperform-software-through-2027", "when": "November 12, 2026", "whenLabel": "Nov 12, 2026", "date": "2026-11-12", "precision": "day", "event": "Applied Materials, revenue growth from a year earlier, quarter ended October 25, 2026: whether it comes in at or above 60%.", "status": "pending", "resultId": null, "sameAs": null, "stage": "pre", "callExpects": "no", "callExpectsBy": "Desk Editor (level B)", "callExpectsAt": "2026-10-22T03:45:00Z", "callProbability": 26, "callProbabilityAt": "2026-10-22T03:45:00Z", "callProbabilityHistory": [], "source": { "kind": "thesis", "ref": "tests[5].date", "url": null }, "resolver": { "kind": "manual", "rule": "Compare the revenue that Applied Materials reports for the quarter ended October 25, 2026 with the quarter ended October 26, 2025, in its 10-Q or 10-K filing on SEC EDGAR. The answer is yes if growth is at or above 60.0%; no if it is below 60.0%.", "question": "Did the revenue of Applied Materials for the quarter ended October 25, 2026 grow at or above 60.0% from the quarter ended October 26, 2025?", "source": { "label": "SEC EDGAR, XBRL company facts of Applied Materials (Forms 10-Q and 10-K)", "url": "https://data.sec.gov/api/xbrl/companyfacts/CIK0000006951.json" }, "ambiguity": "If Applied Materials has not filed by December 31, 2026, or a filing restates a period the rule reads, the test is inconclusive, and the Result says what was read and what was missing.", "specState": "approved", "specVersion": 1, "specUpdatedOn": "2026-10-22", "specHistory": [ { "version": 1, "date": "2026-10-22", "reason": "First specification.", "by": "Desk Editor (level B)" } ], "callExpects": "no", "format": "ladder", "group": "th050-amat-revenue-yoy", "threshold": 60, "direction": "above", "unit": "%", "think": { "baseRate": "Applied Materials's revenue growth from a year earlier was 24.8% for the quarter ended July 26, 2026, by its filing on SEC EDGAR.", "outsideView": "The year-earlier quarter is not on the same concept in the filings, so the rungs sit on the last print alone.", "wouldChange": "The results-calendar consensus for the quarter ended October 25, 2026 implies 51.5%, and the middle rung is centred there." } }, "url": "https://deepstack.ltd/docket/#test-th050-t06", "storyUrl": "https://deepstack.ltd/theses/semis-outperform-software-through-2027/#tests", "resultUrl": null, "machines": [ { "model": "claude-opus-5", "p": 5, "at": "2026-10-22T03:44:35Z" }, { "model": "deepseek-reasoner", "p": 2, "at": "2026-10-22T03:44:40Z" } ], "readers": null } ] }