Oracle's latest earnings have become a potential turning point for software stocks after months of weakness driven by fears that artificial intelligence would disrupt the sector. Dan Ives, a partner and senior managing director at Yorkville Ives, said on CNBC's Fast Money that institutional investors need to rotate back into software names including Oracle, Adobe, Palantir and Snowflake. Ives said Wall Street had underpriced Oracle's backlog, effectively assigning it a 50% to 60% chance of never converting into revenue. That conversion depends on Oracle building enough data center capacity to meet demand from its cloud and AI customers. He described Oracle as a "penalty box stock" and said a single strong quarter would not be sufficient; the company must demonstrate follow-through before investors fully re-rate its shares. Ives remains more confident in semiconductors, citing a 13-to-1 demand-to-supply ratio in Asian chip markets and describing Nvidia as a safer choice than AMD or Intel as they work to close the gap. Although a series of software earnings turnarounds has improved sentiment, Ives stopped short of declaring a full buy signal, describing conditions as "lime green." The sector is still proving its recovery, and whether sentiment strengthens further may depend on Oracle's performance in coming quarters.