Hello everyone, and welcome back to the U.S. stock analysis channel. I’m lorder. All four major indices moved higher today, led by the Nasdaq. Nvidia NVDA surged 8 percent, driving all 25 components of the Philadelphia Semiconductor Index higher. Meanwhile, the software sector broke out to the upside, led by CRM and CrowdStrike CRWD. But looking at the broader market, even though the indices rose, they were severely drained by tech stocks. Only 152 S&P 500 components advanced, while 349 declined. The picture across the S&P 500’s eleven sectors was even worse — aside from the tech sector, which rose 3 percent on its own, the remaining ten sectors all fell. It’s unexpected: for nearly a year, the Philadelphia Semiconductor Index and software acted like rivals on a seesaw, but today they sat down on the same side of that seesaw, with the rest of the market on the other.

The overall flow of funds in today’s market was fairly clear: the AI trade continues to develop and attract speculation. Software companies that were previously feared to be disrupted by AI are now transforming, using AI to boost efficiency and drive revenue growth. It looks like they won’t perish — they’ll thrive. This earnings season, companies like CRM and CRWD both emphasized their artificial intelligence strategies, and a lot of their commercialization progress has been very solid, earning market recognition. So AI and software can be competitors, but they can also be partners. Whether other software companies can keep up with the times depends on whether their leadership can rapidly drive transformation. Our overall stance is bullish on tech stocks, especially AI, software, and the cybersecurity sector. Market funds are highly concentrated in tech stocks, the AI theme continues to gain momentum, and the software and cybersecurity sectors are breaking out strongly, driven by earnings reports. Bellwether stocks like Nvidia NVDA show strong technicals and have the potential to hit new highs. However, we need to be alert to market divergence and the risk of short-term overbought conditions in some individual stocks due to short covering.

Let’s take a closer look at IGV’s breakout. IGV hit an intraday high of $108, breaking through the $105 resistance level on heavy volume, with a bullish outlook toward the prior high of $117. As long as it doesn’t fall below $101, any pullback can be viewed as consolidation. This kind of high-volume breakout above a key resistance level, followed by a minor pullback to confirm support, is a classic bullish technical structure.

First, let’s look at the earnings-related names. CRWD delivered strong results, with impressive ARR growth, but the stock is already overvalued. Technically, it’s at new highs on the right side of the chart with no clear resistance, but the risk of chasing it in the short term is high. It’s suitable for long-term holders who expect earnings to be consistently revised upward. MRVL pulled back after earnings, and its valuation is moving toward a reasonable level. At the current price of $224, long-term investors can look for opportunities in the strong support zones of $188 to $211, or $160 to $172. Overhead resistance is heavy, in the $253 to $272 and $278 to $318 ranges. A long-term stop-loss could reference the $160 level.

Within the software components, a few names show strong momentum. PLTR is currently priced at $185, nearing a breakout above the key resistance at $192. If it breaks through, the upside target is new highs. The structure is simple and clear, making it a potential priority target for fund flows. Support sits at $175. NOW is in an uptrend on the right side of the chart, with a first target of $147 to $159. A breakout above that points to $180 to $190. There’s room for long-term valuation to be revised upward. Prior key support is at $110. Microsoft MSFT is technically bullish after breaking above $514. Based on its AI monetization prospects, the long-term view targets above $600, corresponding to a median valuation of $632 for fiscal year 2028.

Regarding other software stocks, CRM surged but has not broken through the key resistance at $277. We need to observe whether it can break out effectively, and be alert for stalling or topping patterns after short covering. ORCL has a poor technical structure — heavy resistance, nearby support, and a narrow trading range, making it a non-priority for fund flows. INTU is sandwiched between support at $321 and resistance in the $346 to $363 zone, limiting its movement. ADBE is slowly grinding higher and is about to face a challenge from the strong resistance zone between $322 and $361.

On the semiconductor side, Nvidia NVDA is currently priced at $227.98, surging on heavy volume. Technicals across all timeframes support an upward move, and a breakout above the prior high of $228 is imminent. However, the advance is expected to take the form of a choppy grind higher rather than a continuous, aggressive surge.

For cybersecurity stocks, names like PANW and FTNT are similar to CRWD — at new highs on the right side of the chart with no overhead resistance, but their valuations are extremely high, with forward valuations doubled. They are only suitable for investors who can tolerate high volatility and believe in the sector’s long-term demand. PANW is currently trading near $382.

Today’s surges in stocks like CRM and Nvidia NVDA were accompanied by abnormally large trading volume, which we suspect is partly driven by short covering rather than purely fundamental buying. This signals a risk of short-term overbought conditions. Once the covering power fades, the rally may struggle to sustain itself. At the same time, the market is extremely divergent — the index gains are driven by a handful of tech stocks, creating a suction effect, and market breadth is poor. The share prices of many software and cybersecurity stocks have already far exceeded their forward valuations, posing a valuation bubble risk. Long-term holding depends on earnings consistently beating expectations and being revised upward. Some individual stocks have seen massive short-term gains, and technical indicators may be entering overbought territory, suggesting a need for a pullback to consolidate. Additionally, key resistance levels, such as $277 for CRM and $228 for Nvidia NVDA, need to be watched to see if they can be broken effectively; otherwise, they could form a barrier and trigger a pullback.

As I’ve mentioned before, everyone was almost falling asleep in August — it’s time to wake up. September and October are coming, two months that historically see higher volatility, and also months that are historically volatile around midterm elections. I hope you all enjoy tomorrow’s stable market action — it should be fairly steady. That’s all for today. See you at the same time tomorrow.