Software is breaking investors’ hearts—again.
A week after its fastest rebound in nearly a year, the group is falling again. The iShares Broadened Tech-Software Sector ETF ( IGV ) is back in the red this week, and Adobe ( ADBE ) is reminding investors how quickly hope can be lost. The latest move looks less like a new start than another phase in the market’s AI scare business.
This leaves investors with a few, if any, questions during market timing: buy the dip, or sell the wrap?
The fall from February 23 was true. IGV rallied about 15% from this low last Friday, and a long list of beaten names rose with it. Cloudflare (NET), CrowdStrike (CRWD), Datadog (DDOG), Intuit (INTU), and Thomson Reuters (TRI) all posted double-digit gains.
But hope quickly faded.
As of Friday afternoon, only a few names in the group had tested positive for the week. Broadband and cloud ETFs rebounded. What looked promising last weekend started to feel, once again like a mercenary business rather than a leadership for trust.
The software stock had simply hit a technical wall.
IGV fell hard off the February low, but the move went straight to major resistance near 88 – a key Fibonacci retracement level and exactly the kind of area where shorts had reason to rally. They did. Strong leadership usually pushes through the first big test and forces skeptics to rethink the story. The software didn’t get there.
Adobe has become a stand-in for this frustration. The stock took a hit on Friday after earnings and a surprise CEO success announcement — and is still down more than 25% this year.
In the long-term chart, the loss is highly reversible. ADBE peaked in late 2021, made another run that ended in early 2024, and is now near 2019 levels again. Investors have been waiting a long time for a clean turnaround that hasn’t arrived.
This helps explain why AI, for now, looks less like a tailwind for software than a new source of skepticism.
Software companies can talk about the copilots, productivity gains, and intelligent workflows they want. Investors want proof that AI can raise prices, save margins, and create new revenue — not just defend existing products. Until then, AI may be as much a valuation head as a growth story.
Lee Munson, chief investment officer and chief investment officer at Portfolio Wealth Advisors, put it bluntly in a Yahoo Finance interview on the floor of the New York Stock Exchange. “Software multiples can go lower. And I think it’s dead money now from a chart perspective.”
