Is the "software apocalypse" over? The war in Iran has not prevented the return of investors in software
At the same time, bets against software stocks reached the highest level since the 2008 crisis
Piper Sandler recommended buying CrowdStrike shares ahead of the report / Photo: bluestork / Shutterstock.com
Software stocks got a slight boost in March 2 trading as investors took the morning sell-off - amid escalation in the Middle East - as an opportunity to buy back the drawdown in lower-priced stocks, CNBC writes . The iShares Expanded Tech-Software Sector ETF, which tracks stocks of software companies, is up 1.5%. At the same time, it is down 22.6% since the beginning of the year due to the so-called software apocalypse - fears that the industry is threatened by an AI boom.
Who was on the plus side
- Quotes of cybersecurity solutions provider CrowdStrike rose by 3% at the end of the session. Piper Sandler analyst Rob Owens upgraded the company's rating from neutral to a buy recommendation ahead of its quarterly earnings release scheduled for March 3, MarketWatch notes. Owens believes fears that CrowdStrike's business will be disrupted by AI tools, particularly Anthropic's Claude Code Security feature, are unfounded. In his view, the company is more likely to benefit from AI development than be displaced by it. AI could be "the next multibillion-dollar security opportunity as it creates new vulnerabilities that require protection," the analyst wrote. He expects CrowdStrike to lead the recovery of the cybersecurity sector.
- Shares of cybersecurity solutions provider Zscaler also rose on Monday, up 1.1%.
- The securities of accounting software developer Intuit added 2.5% in value.
- Shares of software developers and cloud service owners Microsoft and Oracle returned to growth after declining at the end of last week. They rose in price by 1.5% and 2.7%, respectively.
- Quotes of AI data collection and analysis platform Palantir Technologies jumped 5.8%. The stock was one of the top gainers in the S&P 500 index on Monday. Revenue from contracts with the U.S. government accounted for 41% of Palantir's revenue in the fourth quarter and could increase amid rising defense spending, CNBC writes.
The threat of shorties
At the same time, shorts in software stocks have reached their highest level since the 2008 global financial crisis, according to a Deutsche Bank Research analysis cited by CNBC.
According to the bank's analysts, investors playing on the downside sharply increased their bets against shares of software developers. The median level of short positions in the sector has exceeded 5% - this has not happened for about 17 years. During the crisis of 2008, this figure exceeded 9%, Deutsche points out.
This article was AI-translated and verified by a human editor
