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Investors yanked $700 million from the top software ETF in a single session, and within hours a major earnings report threatened to make that timing look catastrophic.
Earlier this year, a fear psychosis had gripped investors that advances in AI would replace software firms, and the sector was all but written off. Anthropic's launch of new plugins for its Claude Cowork system in February sparked a global selloff in software firms, with the US markets alone losing $300 billion in market value in a day.
August was a good month for tech stocks, especially software companies that had slumped earlier in the year.
The AI trade is entering a new phase. After years of infrastructure spending, the focus is shifting toward software that can turn computing power into revenue and productivity.
Saira Malik, Chief Investment Officer at Nuveen, talks about what she wants to hear from Fed Chair Kevin Warsh in Jackson Hole and she explains why she's bullish on software stocks. Malik speaks on "Bloomberg The Close.
The iShares Expanded Tech-Software Sector ETF has rebounded, but AI-driven sector changes demand a more selective approach to software exposure. Earnings strength in software is currently sustained by price increases on renewals, not new customer growth, raising sustainability concerns.
Palantir just staged one of the sharpest recoveries in enterprise software, but the stock still sits below where the year began and trades at a valuation that makes most analysts nervous. The math on what to do next is trickier than it looks.
Software has outperformed the S&P 500 and semiconductors, rebounding sharply from April lows and showing resilience amid market volatility. CrowdStrike and Salesforce earnings are pivotal this week; CRWD must deliver strong beats and guidance, while CRM must counter the 'AI Eating SaaS' narrative. CRWD faces downside risk of 10–15% given high valuation and recent executive departure, but a positive surprise could lift cybersecurity and IGV broadly.