Software Stocks Suffer Deep Relative Underperformance
Global software stocks plunged in February 2026, with bellwether names falling 15–35% over the prior 30 days as markets price AI-driven disruption, per Feb. 21, 2026 analysis. Ratio charts show the IGV software ETF's performance versus the Nasdaq has reverted to its 2002 post-dotcom trough with a 37% drawdown, while the SOXX semiconductor ETF hits post-dotcom highs, favoring chip exposure.
Key Points
- 1Shows IGV-to-Nasdaq ratio reverting to dotcom bottom with a 37% drawdown
- 2Highlights SOXX reaching post-dotcom highs, reflecting an AI-driven surge in chip demand
- 3Implies cautious investing: software valuations below five-year averages, semiconductors face stretched multiples
Scoring Rationale
Data-driven, industry-wide analysis highlighting severe software underperformance and semiconductor strength; limited novelty, mainly market-timing commentary without new causal evidence.
Sources
Public references used for this report.
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