Beaten-Down Software ETF Approaches Key Support Level
The largest software-focused ETF has retreated sharply and is approaching a price zone that attracted buyers during last year’s market downturn.
Software stocks have been absolutely hammered this year as concerns grow that AI could disrupt large swaths of the industry.
The iShares Expanded Tech-Software Sector ETF (IGV), the largest software-focused ETF with about $6 billion in assets, has seen $326 million of outflows year to date and roughly $4.2 billion over the past year. The fund is down about 22% so far this year and a similar amount over the past 12 months.
The selloff has been driven by sharp declines in many of IGV’s largest holdings, including Microsoft (9.7% weighting), Palantir (8.3%), Salesforce (7.7%), Oracle (7.4%), Intuit (5.0%), and Adobe (4.8%).
Microsoft’s earnings report last week came in slightly lighter than some investors were hoping for, triggering another leg down across software stocks. But the group had already been under pressure, as AI companies like OpenAI and Anthropic rolled out tools that ignited fears about pricing power, competition, and long-term demand for traditional software products.
While the fundamental backdrop remains shaky, the drawdown has pushed IGV close to a notable technical level. The ETF bottomed near $80 last April during the market’s tariff-related selloff, a level that could attract interest from short-term traders.
