Nasdaq 100 Dips Amid Software Selloff, Shaping Up for Red Week

Tech-heavy index trades 0.26% lower as sector rotation favours semiconductors over enterprise software; Micron surges while Atlassian and Workday tumble

The Nasdaq 100 opened the final trading session of the week in volatile fashion, currently trading 0.26% lower at 25,480.74. The index retreated approximately 1% from its opening levels and now sits 0.56% lower for the week. Markets are grappling with a pronounced sector rotation that has seen semiconductor stocks rally sharply whilst enterprise software names face sustained selling pressure.

The index’s performance reflects a broader recalibration within the technology sector, where artificial intelligence infrastructure plays continue to attract capital whilst concerns over enterprise spending cycles weigh on cloud-based software providers.

Semiconductors Lead Charge Higher

Micron Technology emerged as the session’s standout performer, surging 5.98% to $356.76 in early trading. The memory chip manufacturer has now gained 80.76% over the past three months and an extraordinary 185.08% over six months, propelled by insatiable demand for high-bandwidth memory products essential for AI data centre applications. Over the past year, Micron shares have skyrocketed 247.30%, cementing its position as one of the index’s top performers.

Advanced Micro Devices climbed 1.78% to $231.98, extending its six-month gain to 51.10% as markets continue to reward the chipmaker’s competitive positioning in both data centre processors and AI accelerators. AMD’s 1.32% three-month gain, whilst modest compared to Micron’s explosive rally, underscores sustained confidence in the company’s product roadmap and market share gains against traditional rival Intel.

Honeywell International added 2.06% to $219.46, providing diversification benefits within the index despite facing headwinds in its aerospace division. The industrial conglomerate’s modest 0.80% three-month gain and 11.67% six-month decline reflect ongoing challenges in commercial aviation markets, though its building technologies and performance materials segments continue to generate stable cash flows.

Software Sector Faces Sustained Pressure

The session’s laggards painted a starkly different picture, with enterprise software stocks bearing the brunt of selling pressure. Atlassian plummeted 4.60% to $122.54, marking a fresh multi-month low as the collaboration software provider grapples with concerns over market saturation and decelerating growth rates. The stock has now declined 11.82% over three months and 28.04% over six months, with its one-year loss standing at a painful 44.04%. The selloff reflects broader anxieties about the sustainability of pandemic-era digital transformation spending and intensifying competition in the collaborative workspace segment.

Workday shed 3.11% to $186.73, extending its three-month decline to 15.87% as investors reassess valuations in the human capital management sector. The enterprise resource planning specialist has lost 11.22% over six months and 18.89% over the past year, with analysts citing concerns about elongating sales cycles and pressure on IT budgets as corporations prioritize AI infrastructure investments over back-office software upgrades.

AppLovin fell 4.06% to $582.34 despite posting impressive longer-term gains of 87.87% over six months and 108.24% over the past year. The mobile app technology company’s 13.32% three-month gain suggests recent momentum has stalled, potentially due to profit-taking following its extraordinary 2025 rally and emerging questions about the sustainability of growth in mobile advertising markets.

Constellation Energy suffered the session’s steepest decline, plunging 9.41% to $309.10 as the nuclear power generator faced selling pressure despite longer-term gains. The stock’s 14.38% three-month decline contrasts with its 2.31% six-month gain and 15.46% one-year advance, with the sharp intraday move potentially linked to shifting sentiment around energy policy or near-term power price dynamics.

Broader Market Context

The index currently trades within its established range, having posted an 18.70% year-to-date gain as of recent data, with its 52-week range spanning 16,542.20 to 26,182.10. The recent pullback from the 26,000 level suggests technical resistance remains formidable, whilst support appears to be forming around the 25,200-25,400 zone based on recent trading patterns.

The stark divergence between semiconductor and software performances underscores a fundamental shift in market leadership within the technology sector. Whilst AI infrastructure beneficiaries like Micron and AMD continue to attract aggressive buying, enterprise software providers face mounting scepticism about their ability to sustain premium valuations amidst moderating growth trajectories.

Analysts have noted that corporate IT budgets are increasingly being redirected towards AI capabilities and the underlying compute infrastructure required to support large language models and machine learning workloads. This reallocation appears to be occurring at the expense of traditional software-as-a-service spending, particularly in mature categories like collaboration tools and human capital management systems.

The software sector’s malaise also reflects broader concerns about valuation compression as interest rate expectations evolve. Software companies typically trade at elevated multiples based on projected future cash flows, making them particularly sensitive to changes in discount rates and growth assumptions.