By Rachel Schlueter
Publication Date: 2026-05-18 00:00:00
Key insights
- With software stocks lagging and hardware stocks surging, the technology sector saw a large performance gap in 2026 and has continued the trend of ever-widening dispersion since 2021.
- Hardware stocks related to data center storage and semiconductors have helped the technology sector regain momentum.
- Software stocks continue to lose ground as the gap between share price and earnings widens.
Depending on where you look, it’s either been a fantastic year for tech stocks or it’s been a lousy one.
The difference reflects the very different impacts of the artificial intelligence boom. Shares of the companies supplying the expansion – particularly semiconductor and memory companies – have soared, in some cases doubling or tripling in price in just a few months. Meanwhile, software stocks whose business models and competitive advantages are considered threatened by AI are recording losses.
“Essentially the market’s thesis is that artificial…