As for software, William Blair analyst Arjun Bhatia told MarketWatch that although P/E multiples have come down, the fundamentals for many software companies have been "solid," which the market doesn't reward.
"The market is saying there is an opportunity cost to holding software stocks," he said.
He said the biggest thing driving software down is the reality that money that might have been invested in software could instead be put toward semiconductor stocks that have "exploded" this year.
"The party is happening in physical infrastructure," he said, noting that the market is favoring anything to do with the build-out of data centers, including energy, semi-cap equipment, semiconductors, networking, and some construction and industrials.
"If AI is [to] benefit software, it's going to happen in another ... 12 to 36 months. It's not going to happen tomorrow," Bhatia said.
