Is it “SaaSpocalypse Never”?
Software stocks have rebounded sharply from an artificial intelligence-driven selloff that saw the group fall nearly 40% from last year’s highs, and rose about 6% on Monday, delivering its best performance for the year. iShares Enhanced Technology Software Sector ETF (IGV) It entered positive territory for the first time. After recovering 44% from its April lows, the fund is now less than 9% below its all-time high from September.
Cybersecurity stocks are leading the way. Amplify Cybersecurity ETF (HACK) It is now up more than 30% year-on-year, driven by profits from companies such as . cloud strike and palo alto networkswill increase by 67% and 63%, respectively, in 2026.
Christian Magoon, CEO of Amplify ETF, which owns HACK, said, “The more secure AI becomes, the more there will be a need for cybersecurity.” “We believe this will also impact the M&A potential of the industry.”
The jump in prices has been a boon for options traders who had been in a pullback for weeks, turning the move into a reversal as early as mid-May. VanEck Semiconductor ETF (SMH) In IGV, call volume started to exceed puts. This trend continued on Monday, with more than twice as many calls as puts compared to SMH, where puts were three times as many as calls. IGV had about twice as many calls bought as it sold.
iShares Expanded Tech Software ETF (IGV) Year-to-date
“This software rally is as heated as the Knicks in the NBA playoffs, and the doubters are being proven wrong every day,” Dan Ives, managing director and senior equity research analyst at Wedbush Securities, said in a text.
New challenges await bulls. A series of major software gains are expected in the coming weeks, including Palo Alto Networks on Tuesday and CrowdStrike on Wednesday. oracle Later this month.
The large inflows into Oracle, which has the largest weight in the IGV ETF, look encouraging. Premiums on stock options on Monday amounted to $1.3 billion, of which $1 billion was tied to call contracts. Calls traded on a volume basis outnumbered puts by more than three times, and more calls were bought than sold, with over 114,000 calls potentially bought. By comparison, just over 25,000 puts were purchased.
Traders are expecting a big move on CrowdStrike’s earnings on Wednesday, which is more imminent. Cboe’s LiveVol data shows that option prices suggest the stock is up almost 9% heading into print, but the options market has overestimated the actual price movement over the past seven quarters.
