We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Software stocks have rebounded strongly over the past month, driven by blockbuster earnings from sector leaders and easing fears over AI-related disruptions.
Microsoft ((MSFT - Free Report) ) stock surged 16% after its results demonstrated that massive AI investments are paying off. Its one-day market capitalization gain of $450 billion marked the largest single-day increase by any US company in history.
Palantir’s ((PLTR - Free Report) ) revenue nearly doubled in the second quarter, and the company raised its full-year revenue outlook. The stock has surged almost 50% since reporting what CEO Alex Karp described as “otherworldly” results.
Salesforce ((CRM - Free Report) ) jumped 23% in its best day since 2020 after reporting strong earnings and expanding its partnership with Anthropic to deepen AI integration across its product suite.
CrowdStrike ((CRWD - Free Report) ) rose more than 20% after raising its guidance on increased demand spurred by AI-related cybersecurity risks, while peers like Palo Alto Networks, Okta, and ServiceNow also posted solid gains.
Earlier this year, investors aggressively sold software shares over concerns that emerging AI technology would disrupt traditional business models. The sell-off accelerated following the release of new productivity tools from leading AI labs like Anthropic and OpenAI.
Software-as-a-Service (SaaS) providers were hit especially hard during the downturn as markets questioned long-term demand for standard seat-based subscriptions.
Industry analysts note that while smaller niche players face real disruption risks, established software leaders remain well-positioned. Enterprise clients are deeply integrated into their ecosystems, and these incumbents hold massive troves of proprietary data.
Furthermore, these firms are deploying generative AI internally to enhance platform capability and lower operational costs.
After months of heavy concentration in semiconductor stocks, capital has begun rotating back into software as valuations became too attractive to ignore.
The iShares Expanded Tech-Software Sector ETF ((IGV - Free Report) ) holds North American companies in the software industry.
The SPDR S&P Software & Services ETF ((XSW - Free Report) ) tracks a modified equal weighted index of software and services stocks.
To learn more, please watch the short video above.
View the Zacks #1 Rank List
Software Stocks & ETFs: Is the AI Sell-Off Over?
Software stocks have rebounded strongly over the past month, driven by blockbuster earnings from sector leaders and easing fears over AI-related disruptions.
Microsoft ((MSFT - Free Report) ) stock surged 16% after its results demonstrated that massive AI investments are paying off. Its one-day market capitalization gain of $450 billion marked the largest single-day increase by any US company in history.
Palantir’s ((PLTR - Free Report) ) revenue nearly doubled in the second quarter, and the company raised its full-year revenue outlook. The stock has surged almost 50% since reporting what CEO Alex Karp described as “otherworldly” results.
Salesforce ((CRM - Free Report) ) jumped 23% in its best day since 2020 after reporting strong earnings and expanding its partnership with Anthropic to deepen AI integration across its product suite.
CrowdStrike ((CRWD - Free Report) ) rose more than 20% after raising its guidance on increased demand spurred by AI-related cybersecurity risks, while peers like Palo Alto Networks, Okta, and ServiceNow also posted solid gains.
Earlier this year, investors aggressively sold software shares over concerns that emerging AI technology would disrupt traditional business models. The sell-off accelerated following the release of new productivity tools from leading AI labs like Anthropic and OpenAI.
Software-as-a-Service (SaaS) providers were hit especially hard during the downturn as markets questioned long-term demand for standard seat-based subscriptions.
Industry analysts note that while smaller niche players face real disruption risks, established software leaders remain well-positioned. Enterprise clients are deeply integrated into their ecosystems, and these incumbents hold massive troves of proprietary data.
Furthermore, these firms are deploying generative AI internally to enhance platform capability and lower operational costs.
After months of heavy concentration in semiconductor stocks, capital has begun rotating back into software as valuations became too attractive to ignore.
The iShares Expanded Tech-Software Sector ETF ((IGV - Free Report) ) holds North American companies in the software industry.
The SPDR S&P Software & Services ETF ((XSW - Free Report) ) tracks a modified equal weighted index of software and services stocks.
To learn more, please watch the short video above.