Hello everyone, welcome back to the U.S. stock analysis channel. I'm lorder. Today is the first trading day of July, and institutional and systematic capital is re-entering its allocation cycle. The Nasdaq led the decline today, with semiconductors turning lower again, dropping 6%. But interestingly, aside from Nvidia, which fell in line with the semiconductor sector, all other six mega-cap stocks moved higher. Meta, often called one of the two "sleepy stocks," surged 8% today, largely thanks to a Bloomberg report that Meta plans to build a cloud computing business and sell its excess AI computing capacity. Today's semiconductor decline is also tied to this news. Meta has fired the first potential bullet signaling a reduction in capital expenditures. We'll analyze that shortly.

I am turning bearish on the semiconductor sector and cautiously bullish on select software stocks and the Big Four tech names – Meta, Microsoft, Google, and Amazon. Meta's plan to sell excess AI computing power is the first sign that capital expenditure growth among the Big Four may be slowing, directly challenging the core "scarcity of computing power" thesis for semiconductors and putting pressure on the sector. Capital may rotate from semiconductor hardware into software. If the Big Four can advance AI monetization while controlling capex, their stock prices should find support.

Semiconductors have been chopping around since June 15. It's been noisy, but the trend has failed to break above prior highs and has instead fallen back to the lows seen since June 15. To avoid further decline, the Philadelphia Semiconductor Index needs to quickly print a new high; time is not on its side. On the other side of the seesaw from weak semiconductors, software continued to perform well today, rising 3% and doing so on increasing volume. The software ETF is gaining volume as it approaches a key resistance level at 94.5. A breakout above that opens the door to 101+ and then 107, with momentum strengthening and two gap-ups already in place.

Meta is bullish in the near term, boosted by the news of selling computing capacity and halting its recent decline. It needs to hold support at 559 while waiting for Q2 earnings to provide clearer financial signals. Microsoft is in a strong consolidation range between 375 and 435. A breakout above 435 is needed to open up a right-side opportunity. Google and Amazon are consolidating sideways on declining volume, with no clear direction – stay on the sidelines. Tesla is range-bound, with resistance at the upper end near 465; a clean breakout is needed.

Palantir PLTR is rising on volume, trading in the 121 to 130 range. A breakout above 130 targets 151+. AppLovin APP has been rising on volume for three consecutive days. A breakout above 570 targets 617+, then a challenge of the prior high at 660. ServiceNow NOW is seeing a moderate increase in volume. A breakout above 120 targets 140+.

Nvidia is relatively neutral. While affected by semiconductor sector sentiment, its large market cap and lack of excessive prior speculation suggest it will likely decline less than peers, behaving more like a value stock. Oracle is bearish, falling on volume due to the Meta news. Its large backlog of unfulfilled data center contracts faces the risk of slowing demand, and its balance sheet is in poor shape.

If AI monetization progresses slower than expected, the entire AI investment thesis could be re-evaluated. The semiconductor sector faces the risk of a "downward negative feedback loop" due to leveraged ETFs; only a sustained decline can break the current stalemate. Oracle, due to its premature business transition and heavy balance sheet pressure, is particularly vulnerable to shifts in industry demand. The Big Four's Q2 earnings guidance on 2027 capital expenditures will be critical. Any signal of a slowdown would severely hit high-expectation semiconductor growth stocks. The host also notes that liquidity issues will be discussed in a future episode.

The first half of the year saw many mega-cap tech stocks underperform, but the market landscape can shift in an instant. Wishing you good luck with your investments! We'll see you tomorrow at the same time.