Software Stocks Rebound as Investors Bet on AI Potential
The iShares Expanded Tech-Software Sector ETF has surged nearly 42 percent from its April low as fears of AI disruption turn into optimism. Investors are favoring firms like Datadog and Oracle that are successfully integrating AI tools and shifting toward usage-based pricing models.
The iShares Expanded Tech-Software Sector ETF has surged nearly 42% from its April low as investors bet on AI integration. The sector-wide rebound has narrowed 2026 year-to-date losses to under 2% following a previous 30% collapse. Software firms are now pivoting toward usage-based pricing models to capture value from AI demand rather than relying on traditional per-headcount subscriptions.
### Shifting Sentiment From Disruption to Adoption The software rally accelerated during the previous week after strong financial results and guidance from Snowflake and MongoDB improved market sentiment. Thomas Blakey, managing director of software equity research at Cantor, said the results demonstrate that software companies will be beneficiaries of AI. Blakey noted that investors had previously priced in a scenario that was too negative regarding the technology's impact.
