Software stocks just passed a big milestone
“SaaSpocalypse Never?” Could it be?
Software stocks are recovering from an AI-fuelled selloff that saw the group lose nearly 40% from last year’s highs, and rebounded nearly 6% on Monday in a rally that matched its year-to-date performance. iShares Extended Technology-Software Sector ETF (IGV) It entered positive territory for the first time. The fund is now less than 9% below its all-time high in September, following a 44% rally from its April low.
Cybersecurity stocks lead the way in this regard Strengthen Cybersecurity ETF (HACK) It’s now up more than 30% annually, thanks to gains in companies like CrowdStrike And Palo Alto NetworksIn 2026, it increased by 67% and 63%, respectively.
“AI equals demand for more cybersecurity because there is more to secure,” said Christian Magoon, CEO of Amplify ETFs, which owns HACK. “We think this also plays into the merger and acquisition potential for the industry.”
Rising prices are rewarding option traders who have been heading for a comeback for weeks, and have been making a comeback since mid-May. VanEck Semiconductor ETF (SMH) to IGV, where call volumes began to outpace sales. This trend continued on Monday; More than twice as many trades were traded compared to SMH, where the trading volume was three times the buying volume. Approximately twice as many calls were purchased on IGV as were sold.
iShares Extended Technology Software ETF (IGV), YTD
“This software rally is as hot as the Knicks are in the NBA playoffs and is proving the skeptics wrong day by day,” Dan Ives, managing director and senior equity research analyst at Wedbush Securities, said via text.
Bulls have a new set of challenges ahead: a series of big software wins in the coming weeks, including Palo Alto Networks on Tuesday and CrowdStrike on Wednesday, and Seer at the end of this month.
Large flows into Oracle, the top weight in the IGV ETF, look encouraging. Option premiums reached $1.3 billion on the stock on Monday, with $1 billion tied up in call contracts. More than three times as many were traded by volume, and more were bought than sold; More than 114,000 purchases were likely purchased. By comparison, just over 25,000 sales were purchased.
More recently, investors are expecting a big move around CrowdStrike earnings on Wednesday. Option prices point to an almost 9% upside for the stock going to press, but the options market has overpriced the actual move over the last seven quarters, according to Cboe’s LiveVol data.
