1 Momentum Signal Suggests the Software Apocalypse Is Over. Don’t Rush to Buy Just Yet.

A recent technical signal in the iShares Expanded Tech-Software Sector ETF (IGV) suggests that the software apocalypse may be over, but investors should exercise caution before rushing to buy. This momentum signal, which has only occurred three other times in the ETF's history, has been triggered by a 24.5% rally over a five-week period.

However, historical data reveals that many of the stocks in IGV have experienced significant price crashes, and the valuation of these companies is lower than in previous eras. With the AI boom disrupting traditional software models and enterprise IT budgets being scrutinized, the outlook for software stocks is uncertain. While the recent rebound of IGV from around $75 to $110 in five months may appear promising, it is more likely a recovery rather than a significant change in the market cycle.

The ETF's 2026 performance follows a limited tech sector pullback, unlike past periods where the rebound occurred after a more drastic market clearing event. Given the current market conditions, it is essential to approach software stocks with caution and avoid making hasty investment decisions based on this technical signal alone.