Bob Elliott
· Nonconsensus
· February 09, 2026 at 11:06
· ⏱ 5 min read
| Read on Substack ↗
Summary
=== SUMMARY ===
•The selloff in software is not a systemic risk but rather an intra-market rotation. Profits are expected to shift from software vendors ("leeches") to their "real economy" customers who will benefit from lower costs, potentially driven by AI disruption.
•The massive shift by hyperscalers from stock buybacks to CAPEX is a powerful, underappreciated macro stimulus. This corporate "dissaving" will boost real economic activity and growth, putting upward pressure on bond yields and favoring equities over bonds.
Summary
The author presents a macro perspective on the recent sell-off in software stocks and concerns about hyperscaler buybacks. The key argument is that the more significant, underlying trend is the surge in hyperscaler borrowing and capital expenditures, which the author believes will favor stocks over bonds.
•Recent market attention has been on the rout in software stocks and fears over reduced hyperscaler buybacks.
•The author suggests the more important macro story is the increase in borrowing and capex by hyperscalers.
•This trend of rising borrowing and investment is presented as a structural pressure that favors stocks over bonds in the period ahead.