Lighthouse Canton says software services take market lead as AI infrastructure lag despite strong earnings
SPY•Narrow breadth in the S&P 500
A screen of S&P 500 names in uptrends found 78 stocks, about 16% of constituents, highlighting narrow market breadth.
Technology services dominated the momentum list, with health tech and health services also prominent, pointing to a services-led advance.
AI infrastructure remains under pressure
The note warned software margins face medium-term pressure from AI, while AI infrastructure fundamentals remain robust despite a more than 20% SOXX decline.
Market rotation favors software services
Lighthouse Canton flagged a rotation in U.S. equities, with software services taking leadership as AI infrastructure lagged despite strong earnings.
IGV has outperformed SOXX by more than 60 percentage points since late-June lows, reflecting a sharp shift in market positioning.
