SerpApi.Org
The software industry is grappling with renewed headwinds in 2026, as investor sentiment sours and performance metrics deteriorate sharply.
On a rolling five-year basis, monthly returns for software stocks have slipped to just +29.4%—the weakest level since 2013—highlighting a significant slowdown in what was once a high-growth powerhouse.
Compounding the challenges, the iShares Expanded Tech Software Sector ETF (IGV), a widely followed benchmark for the space, has seen roughly $1.44B in outflows since the start of June. With assets under management now at $13.15B, the fund is down 15.9% for the trading year to date.
Major constituents have borne the brunt of the sell-off. Prominent holdings including Microsoft (MSFT), Palantir Technologies (PLTR), Oracle (ORCL), and Salesforce (CRM) have all plunged deep into the red, dragging broader technology and software sentiment lower.
Market participants are closely watching whether these outflows and subdued returns signal a longer-term rotation away from software or merely a cyclical pause amid shifting macroeconomic conditions. Investors remain cautious as the sector navigates this challenging environment.
Software ETFs: (IGV), (IGPT), (XSW), and (AOTS).
