Software Stocks Rebound Against Semiconductors as IGV-SMH Ratio Lifts From 0.13 Low
Updated
Updated · CNBC · Jul 8
Software Stocks Rebound Against Semiconductors as IGV-SMH Ratio Lifts From 0.13 Low
3 articles · Updated · CNBC · Jul 8
Summary
The long-semiconductors, short-software trade is starting to unwind after software’s IGV/SMH ratio bottomed near 0.13 last month and broke above trendline resistance.
Charts cited in the report show software also gaining relative strength versus the tech-heavy XLK and the broader S&P 500, suggesting the move may be more than brief profit-taking ahead of second-quarter earnings.
Jefferies argued most AI-driven fears around software are already priced in, saying durable “systems of record” should benefit because AI agents still need to connect to incumbent enterprise platforms.
Two favored ways to play the shift are ServiceNow and Snowflake: ServiceNow closed at $110.73 versus a $141.12 average target, while Snowflake is testing a breakout near $300 after 34% product-revenue growth and a 22% EPS beat last quarter.