Overview
- Software shares capped a blistering week Friday, with the IGV fund up about 15% for its best week since 2001 as Oracle jumped 32% and Microsoft rose more than 14%.
- Even after the pop, the software ETF is still down about 20% for 2026, reflecting a selloff that drove prices to multi‑year lows earlier this month.
- Investors have punished the group on fears that AI platforms from OpenAI and Anthropic could copy or replace core tools, pulling index valuations down to roughly 21 times forward earnings from nearly 40 last July.
- Wall Street is split, with Bank of America and Piper Sandler calling the move a short-lived bounce due to lingering chart damage, while BTIG points to an extreme gap with chip stocks as a possible turn signal.
- Forecasts still point to a recovery in results, with Bloomberg Intelligence projecting software and services profits to grow about 16.5% in 2027.