Software Stocks Rebound: Analysts Assess Potential Bottom for Microsoft and Peers
The software sector is experiencing a significant market rebound, with the iShares Expanded Tech-Software ETF (IGV) rising over 11% in a single week despite remaining down more than 21% year-to-date in 2026. This recovery coincides with the S&P 500 reaching all-time highs, suggesting that aggressive selling driven by artificial intelligence competition fears may be subsiding. Bank of America technical strategist Paul Ciana indicates that while a clear structural bottom is not yet confirmed, key software stocks show signs of stabilization. Microsoft is undergoing an oversold recovery, Oracle has found long-term support after a steep decline, and Palantir, Salesforce, and Palo Alto Networks are displaying bullish technical indicators such as double bottoms or improving momentum. Barclays also reports a favorable shift in investor sentiment toward high-quality large-cap enterprise names, particularly Microsoft and Oracle. The analysis suggests that while the broader ETF may still be forming a base, the worst performance for individual major holdings could be over, potentially leading to a summer rally.
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Software Stocks Rebound: Analysts Assess Potential Bottom for Microsoft and Peers
The software sector is experiencing a significant market rebound, with the iShares Expanded Tech-Software ETF (IGV) rising over 11% in a single week despite remaining down more than 21% year-to-date in 2026. This recovery coincides with the S&P 500 reaching all-time highs, suggesting that aggressive selling driven by artificial intelligence competition fears may be subsiding. Bank of America technical strategist Paul Ciana indicates that while a clear structural bottom is not yet confirmed, key software stocks show signs of stabilization. Microsoft is undergoing an oversold recovery, Oracle has found long-term support after a steep decline, and Palantir, Salesforce, and Palo Alto Networks are displaying bullish technical indicators such as double bottoms or improving momentum. Barclays also reports a favorable shift in investor sentiment toward high-quality large-cap enterprise names, particularly Microsoft and Oracle. The analysis suggests that while the broader ETF may still be forming a base, the worst performance for individual major holdings could be over, potentially leading to a summer rally.
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