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Momentum Monday - AI Is Scaring Investors as It Spreads From Software Stocks to Financials

Momentum Monday - AI Is Scaring Investors as It Spreads From Software Stocks to Financials

Howard Lindzon
February 23, 2026

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Good morning,

As always, Ivanhoff and I toured the markets looking for trends and momentum.

Right now, it is energy, ai infrastructure, memory, metals and select degeneracy that are holding up the $SPY ( ▼ 1.08% ) . Investors are chasing stocks that are AI immune…which is too trendy for me. Times like this I am glad I mostly index but eventually this AI fear would start affecting the indexes.

In today’s show (we always tape Sunday and if you subscribe can watch the show on YouTube on Sundays) I explain how the AI scare that started with software stocks is spreading to financial stocks. This morning, financial stocks are being pummeled. AI is also coming for the travel aggregators like Expedia and $BKNG ( ▼ 6.55% ) whose stocks are being bludgeoned.

You can see all the show topics and the key charts we discussed below the video and fold…

Welcome back to Momentum Monday!

In today’s episode of Momentum Monday, Ivanhoff and I discuss the following:

Uncertainty: Tariffs and Retail Impact
AI Fears Spreading: Software vs. Hardware
Commodity Strength: Energy and Metals
Financial Sector Risk: Mastercard ($MA ( ▼ 3.9% ) ) and Visa ($V ( ▼ 3.36% ) )
AI Infrastructure: Fiber Optics and Memory Chips
Emerging Markets and Semiconductor Index Analysis

In This Episode, We Cover:

Uncertainty: Tariffs and Retail Impact (0:02)
AI Fears Spreading: Software vs. Hardware (1:45)
Commodity Strength: Energy and Metals (3:54)
Financial Sector Risk: Mastercard ($MA ( ▼ 3.9% ) ) and Visa ($V ( ▼ 3.36% ) ) (7:18)
AI Infrastructure: Fiber Optics and Memory Chips (10:22)
Emerging Markets and Semiconductor Index Analysis (16:05)
Here are Ivanhoff’s thoughts:

The indexes continue to look for direction, but the same trends persist under the surface:

Software remains a minefield. I don’t know how capable the so-called vibe coding really is in the long term, but any news release on the subject is tanking various parts of the software space. Cybersecurity stocks were hit hard on Friday after Antropic revealed Cloude Code Security. The market is in a “shoot first, ask questions later” mode. Even if those AI threats prove unsubstantiated and software companies continue to grow their earnings, the process of multiples reduction is likely to keep the pressure on their stocks.

In the meantime, semiconductors and any AI infrastructure stock remain notably strong – GLW, AAOI, LITE, TSM, ASML, CIEN, SNDK, MU, JBL, COHR, LRCX, MOD, VRT, etc. NVDA reports earnings on Feb 25th after the market close. The stock is essentially flat since August of last year, while the semiconductors ETF, SMH, is up about 40% since then.

The Supreme Court said Trump’s tariffs are unlawful. There was a quick spike in retailer stocks on Friday that quickly faded. The market will need some time to fully digest that information. A couple of things that stood out on Friday were the relative strength of Big Tech vs small caps and the continued ascent of the South Korea ETF. EWY is now up more than 40% year to date.