AI stocks are splitting into winners and losers, and the cheap ones now look like the hardware names rather than the hot software ones.

• Broadcom fell after hours on a weaker sales forecast, even though its business grew fast and it keeps more than half of every dollar as profit.
• Snowflake jumped about 20% on earnings, but the move looks like traders who bet against it being forced to buy back in, not a real change in the business.
• Snowflake is very expensive for what it earns, while chipmakers like Nvidia, Broadcom, AMD and Marvell now look cheap next to their profits.
• The worry hanging over software companies is that AI tools let customers skip them — Salesforce already said it is signing up fewer new customers.
• The bet is that if anything is a bubble this cycle it is AI, not housing.

Outlook: Chip and hardware stocks look oversold and could run to new highs unless the AI bubble worry finally breaks the market.