Pedestrians walk outside Salesforce Tower on Feb. 25, 2026 in San Francisco, California.
Benjamin Fanjoy | Getty Images
Could the software’s long national nightmare be over?
As semiconductor shares dragged down the Nasdaq-100 for a second day, quietly, software stocks appear to have found their groove.
Shares of the iShares Expanded Tech-Software Sector ETF (IGV) climbed more than 1% Monday, adding to a more-than 20% advance off April lows and trading at the highest since January. For many, that’s enough to call it a bull market.
Options traders are leaning into it, selling almost 28,000 puts on the ETF in Monday’s session, a bullish position that reflects a view that the worst is past. The number of calls bought also outnumbered the number of puts bought. When traders sell a put, they are making a moderately bullish bet. They are obligated to buy the underlying stock at that put’s strike price in exchange for the collected premium.
iShares Expanded Tech-Software Sector ETF (IGV), YTD
But traders are making more outright bullish plays.
In one of the biggest options trades of the day, a trader spent $32 million buying 7,000 of the in-the-money 390-strike Microsoft calls expiring Aug. 21. Eight of the top 10 options trades in that stock were call-buyers.
Helping invigorate optimism Monday was a report from Bank of America analyst Tal Liani who reinstated coverage of ServiceNow with a buy rating and $130 price target. Shares popped 9% and options traders pounced, scooping up more than 85,000 calls in the stock and trading five times more calls than puts.
Even beleaguered Salesforce, which the BofA team labeled “underperformed” managed a 3.5% bounce and saw calls outpace puts three-to-one.
While much of the category is still trading well off last year’s highs, there’s at least one categorical exception: cybersecurity. Amplify’s cybersecurity ETF “HACK” is up 16% since April 20, including a 3% rally Monday, as stocks like CrowdStrike and Palo Alto Networks trade at all-time highs.
Software stocks have been crushed in 2026 on fears of a so-called SaaSpocalypse, or the fear that AI agents will replace software companies. Even with the recent rally, the IGV is down 12% on the year.
