Bottom in place for software stocks after horrid start to 2026, says BTIG
This has not been a kind year for software stocks, but investors in the beaten-down group may soon get some relief. BTIG chief market technician Jonathan Krinsky notes that the iShares Expanded Tech-Software ETF (IGV) has rebounded in terms of its relative strength index (RSI). As of Tuesday, the fund’s RSI sits at 46, up from a low under 20 earlier in 2026. And, while it briefly dipped below $77 this month, the ETF is today back trading around $80. “The break below $77 has lasted all of two days, and with it firmly back above that level on heavy volume, we certainly would not want to stay short the group right now,” Krinsky wrote to clients Monday. Software had been a Wall Street darling in recent years. IGV soared 59% in 2023 and another 23% in 2024. It also climbed nearly 6% last year. This year, though, the fund has taken a beating, with investors fearing artificial intelligence may be able to replicate many software functions for a fraction of the cost. IGV is still down 24% in 2026. Last week, it tumbled 7% after Anthropic, and AI platform, said its revenue run rate has topped $30 billion , up from $9 billion at the end of last year. However, Krinsky pointed out: “There is clearly a bottom in place, and as such you can manage risk vs. Friday’s low ($73.93).”