{"id":1224685,"date":"2026-02-06T11:52:29","date_gmt":"2026-02-06T09:52:29","guid":{"rendered":"https:\/\/www.etoro.com\/?p=1224685"},"modified":"2026-03-20T19:22:45","modified_gmt":"2026-03-20T17:22:45","slug":"deep-dive-opportunities-in-software-stocks","status":"publish","type":"post","link":"https:\/\/www.etoro.com\/en-us\/news-and-analysis\/market-insights\/deep-dives\/deep-dive-opportunities-in-software-stocks\/","title":{"rendered":"Deep Dive: Opportunities in Software Stocks?"},"content":{"rendered":"

The Daily Breakdown dives into the software selloff, taking a closer look at valuation, earnings expectations, and key technical levels.<\/p>\n

Before we dive in, let\u2019s make sure you\u2019re set to receive The Daily Breakdown each morning. To keep getting our daily insights, all you need to do is log in to your eToro account.<\/p>\n

Deep Dive<\/b><\/h2>\n

Software stocks are being pummeled as concerns grow that AI could cannibalize parts of their businesses. For now, investors aren\u2019t hunting for value \u2014 they\u2019re indiscriminately selling the group, even though many leading firms remain fundamentally solid. Growth estimates have held up or moved higher, while valuations for several names are approaching, or already below, their long-term troughs.<\/span><\/p>\n

In recent days, the selling has spilled beyond software. Pressure has spread to financial ratings firms, exchanges, cybersecurity names, and travel companies. While the decline may be nearing a capitulation point, the bigger question is less about whether this group can bounce, and more about whether a dark cloud will continue to hang over the space.\u00a0<\/span><\/p>\n

Technically Speaking<\/b><\/h4>\n

Below is a look at the <\/span>IGV<\/span><\/a> ETF, the largest software ETF by AUM. For reference, the top five stocks in the IGV ETF include: Microsoft<\/a>, Palantir<\/a>, Salesforce<\/a>, Oracle<\/a>, and Intuit<\/a>.\u00a0<\/span><\/p>\n

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Chart as of the close on 2\/5\/2026. Source: Bloomberg<\/em><\/figcaption><\/figure>\n

Now down more than 30% from its all-time high in September, IGV is approving the $80 level. There it finds a zone that has been support for two years, as well as the rising 200-week moving average. That doesn\u2019t mean the decline will stop right here, right now. But it\u2019s a technical reference point for investors looking for a potential support area.\u00a0<\/span><\/p>\n

For a refresher on technical analysis, be sure to check out our recent <\/span>Boot Camp<\/span><\/a>.\u00a0<\/span><\/p>\n

Future Growth Projections<\/b><\/h4>\n

Looking at Bloomberg\u2019s S&P 500 Software Index, analysts project solid growth over the next 12 and 24 months:\u00a0<\/span><\/p>\n