Why AI Stocks Are Smiling Again

US software stocks are climbing again, and investors who've been holding their breath can finally exhale. Anthropic's latest announcement has sparked what traders are calling a "relief rally" – but is this the real deal or just another false dawn?

What Moved the Market

Anthropic's new AI model and capabilities didn't just impress technologists; they convinced investors that AI companies can actually make money. After weeks of bubble fears and profitability questions, software stocks are back in favor.

The key difference this time? Anthropic showed concrete revenue pathways, not just flashy demos. The market had been asking "Where's the beef?" and finally got an answer that satisfied Wall Street's appetite.

The Winners and Losers

Not all software stocks are created equal in this rally. AI infrastructure companies – think cloud services and chip designers – are leading the charge. Traditional software companies that haven't pivoted to AI are being left behind, creating a clear divide in the sector.

The numbers tell the story: AI-focused software stocks jumped an average of 8-12% following the announcement, while legacy software companies saw modest gains of just 2-3%. It's a tale of two markets within one sector.

Your Portfolio Reality Check

For individual investors, this rally presents both opportunity and risk. Software stocks still trade at an average P/E ratio of 50+, making them vulnerable to any shift in sentiment. The question isn't whether AI will transform business – it's whether current valuations reflect realistic timelines.

Consider this: Anthropic is still burning cash despite its impressive technology. If a leading AI company hasn't achieved profitability, what does that say about the dozens of smaller players riding this wave?