Deutsche Bank has identified software as a sector capable of hedging investors against growing volatility in semiconductors within the artificial intelligence ecosystem. The four major hyperscalers (Meta, Amazon, Google and Microsoft) have invested approximately $1.1 trillion since early 2023, with investment forecasts of $750 billion this year. Amazon, Microsoft and Google are accelerating their cloud revenue growth, while Apple and Meta saw their shares tumble. Deutsche Bank analysts highlight that while a pure semiconductor portfolio outperformed this year, it produced weaker returns once volatility was factored in compared to a portfolio mixing software and semiconductors.
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