Decomposing the AI Value Chain

Since roughly 2019–2020, the AI value chain stopped trading as a single “long tech” factor: even after controlling for Nasdaq (QQQ) beta, semiconductors (SMH) load positively on yield moves while software (IGV) loads negatively, and this sign split becomes structurally stable. The implication is that “tech” is no longer a sufficient risk label—hardware behaves more like a cyclical/capex asset in the AI build-out phase, while software behaves like a long-duration equity claim dominated by discount-rate risk.