Latest news with #iSharesExpandedTech-SoftwareSectorETF
Mint
4 days ago
- Business
- Mint
AI won't kill software. It will simply give it new life.
The first song ever played on MTV, which made its debut in August of 1981, was a relatively obscure ditty by The Buggles called 'Video Killed the Radio Star." The selection was both cheeky and prescient—the new technology transformed the music industry. Album sales declined, but video play soared, eventually leading to the birth of new stars, wider distribution and revenue, and the consolidation of record labels. Advances in streaming, which developed in the early 2000s despite the industry's effort to stifle it, ultimately added billions more to the pockets of artists, producers, and record companies. OpenAI could be considered the MTV of artificial intelligence, given how its brand recognition, tech-disrupting ethos, and signature ChatGPT chatbot are sending waves of concern across the software investment landscape. The latest version, which launched late Thursday, pumped up the volume even more. GPT-5 which OpenAI calls its most-powerful version to date, can perform tasks such as coding, speech reasoning, and writing. CEO Sam Altman called it a significant step along the path to artificial intelligence. Jordan Klein, a tech, telecoms, and media sector specialist at Mizhuo, was more blunt. 'It highlighted a lot of new great software coding/design features and added gasoline to the dumpster fire of new AI engines, agents, and co-pilots that are just eating the established front office and [development/IT operations] world," he said. A lot of that concern is being reflected in some of the biggest enterprise software companies, such as Salesforce, ServiceNow, and Adobe, which rely on sales to larger institutions to power their top and bottom lines. Salesforce shares are down more than 26% over the past six months, compared with an 8.5% gain for the Nasdaq. ServiceNow and Adobe have slumped 15% and 25%, respectively. The iShares Expanded Tech-Software Sector ETF, the market's largest, is up around 3.4% over the past six months, but most of the gain is tied to its biggest stocks: Microsoft, Oracle, and Palantir. A wider view shows that more than three quarters of the ETF's 113 stocks are trailing the S&P 500 so far this year. Klein at Mizuho worries the bear thesis for software stocks 'will gain more momentum with myriad new AI coding and development tools to come." Curiously, OpenAI's Altman doesn't see things developing that way, and insisted in an interview with the Economic Times of India that there is no evidence that AI coding tools are replacing software engineers. 'We have badly underestimated how much additional software the world wants," he said. 'AI will make engineers more productive and lower the cost of creating software unlocking huge opportunities for economic growth." There is some truth to that. Paul Ashworth, chief North America economist at Capital Economics, points to recent U.S. GDP data which showed a 'massive 86.4% annualized gain in investment in computer equipment and an 18.0% gain in software investment." But he notes software investment growth is still below average. And he also argues a much bigger surge in software and R&D investment will be needed to translate AI advances into worker productivity. Bank of America analyst Brad Sills thinks that investment might not be far off, and estimates spending on agentic AI, which performs tasks independent of human supervision, could rise to $155 billion over the next five years. Interestingly, he likes some of the stocks that have performed so poorly over the past six months, including Salesforce, which markets the Agentforce tool, and ServiceNow, which offers the Now Assist tool. 'We believe industry analysts are underestimating the medium-term uplift to software spending from AI agents," Sills and his team wrote in a recent report. He also noted it could prove to be a defining catalyst for the monetization of the hundreds of billions hyperscalers are spending on AI-powered data centers. D.A. Davidson analyst Gil Luria says enterprise software sales are largely based on the number of people a company will need to use it, and the costs tied to either dump it or replace it with a rival. 'Longer term, the answer to the first question could change if AI agents start carving off tasks from employees," he said in a note published Friday. But that doesn't mean he thinks the software industry is in crisis. Much like the music industry's adaptation in the 80s and the 2000s, he said many software companies are well positioned for the AI revolution. 'While the debate around LLMs moving into the application layer will continue, it is easier to believe that the software that organizes code and data, and then observes and secures it, will be needed even more as AI ramps up," he said. Beyond companies like Microsoft, which are infusing AI-powered technologies into their suite of software products, Luria likes Snowflake, Datadog, and JFrog. Video didn't really kill the radio stars. It just created a different platform for them. AI is just as likely to do the same for software.
CNBC
7 days ago
- Business
- CNBC
How to play the pullback in tech software names this week using options
Better-than-expected earnings growth in Q2 has kept the equity bulls in control. Underneath the surface investors are enjoying the outperformance in technology software names as markets now sit in an interesting vacuum until the Fed's critical September meeting. Even though this rally is getting long in the tooth, I believe there is more room to run. I want to use the iShares Expanded Tech-Software Sector ETF (IGV) to define risk as this basket of tech software stocks has had a tremendous run since Liberation Day lows in April while seeking to further capitalize on a move higher in this basket of software names such as Palantir , Oracle , and AppLovin . CPI data next week will further assist investors in better understanding what the Fed might do at their meeting in September, but the CME Group's Fed Watch tool is currently suggesting a 91% chance of the Fed cutting interest rates. This would be the first 2025 rate cut. Software stocks have endured some broad selling pressure recently, but Fortinet was an extreme example as the cybersecurity leader dropped by over 20% Thursday. Shares plunged after the cybersecurity firm implied a product refresh cycle may be less impactful than the bulls wanted. That being said, I still believe the momentum in tech has the ability to push associated names higher. Instead of picking one individual name, I am choosing to use IGV which owns roughly one hundred different tech companies. I want to define my risk by owning a call spread in the event momentum fades in tech software names and the impressive 2025 rally comes to a screeching halt. The trade Bought the $110 Sept. 19 IGV Call for $3.75 Sold the $120 Sept. 19 IGV Call for $0.50 This trade was executed when IGV was trading just above $110 This spread will cost an investor $3.25 or $325 per one lot The spread will have the ability to profit when IGV is trading above $113.25 DISCLOSURES: (Long IGV, long this call spread) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
Yahoo
13-06-2025
- Business
- Yahoo
Nvidia, Amazon, Google Lead Tech Selloff After Israel Strikes Iran
June 13 - Tech stocks tracked broader markets lower as Middle East tensions rose. The iShares Expanded Tech-Software Sector ETF slipped about 1%, while the Philadelphia Semiconductor Index fell about 2%. Among large-cap names, Google (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) each dropped about 1%, and Nvidia (NASDAQ:NVDA) slid about 1%. Meta Platforms (NASDAQ:META) was little changed, and Microsoft (NASDAQ:MSFT) also saw minimal movement. Apple (NASDAQ:AAPL) showed modest gains but remained within a narrow range. Palantir (NASDAQ:PLTR) bucked the trend, climbing about 1%, possibly on its ties with defense contracts. (NASDAQ:MNDY) declined about 3%, reflecting sensitivity to geopolitical uncertainty. Semiconductor stocks broadly ceded ground: Taiwan Semiconductor Manufacturing (TSM) fell about 2%, Micron Technology (NASDAQ:MU) slipped about 1%, Qualcomm (NASDAQ:QCOM) lost about 1%, and Marvell Technology (MRVL) slid about 2%. IBM (NYSE:IBM) and Kyndryl Holdings (NYSE:KD) each edged down about 1%. The S&P 500, Nasdaq Composite, and Dow all retreated roughly 1% as investors weighed the impact of Israel's strikes on Iran. The effects of the attack have cascaded across global markets, with a strong risk-off move for several asset classes, said Deutsche Bank's Henry Allen. Israeli Prime Minister Benjamin Netanyahu said, This operation will continue for as many days as it takes to remove this threat, underscoring uncertainty. Market participants remain alert to how the situation might affect tech demand and broader sentiment. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-06-2025
- Business
- Yahoo
Wells Fargo sees second-half rebound for software stocks, upgrades Zscaler
-- Wells Fargo expects software stocks to rebound in the second half of the year as macroeconomic concerns ease and enterprise technology budgets normalize, but recommends investors remain selective through the summer. In a mid-year update, the bank said volatility marked the first half of 2025, with tech shares swinging sharply and investor frustration mounting over the slow contribution from artificial intelligence. The firm noted its coverage has broadly returned to end-2024 levels, despite gains in major indexes like the NASDAQ Composite and iShares Expanded Tech-Software Sector ETF (NYSE:IGV). A survey conducted by Wells Fargo pointed to weaker IT spending growth in the first half, up just 2% year-on-year, but highlighted continued resilience in cloud infrastructure, cybersecurity, and generative AI initiatives, particularly in customer service. Microsoft (NASDAQ:MSFT) emerged as the top vendor, with over half of respondents expecting to increase spend. AI revenue monetization remains limited across most of software, the note said, but activity in the data space is picking up, with new SaaS data platforms and acquisitions gaining momentum. Wells Fargo raised its price targets on Microsoft and Snowflake (NYSE:SNOW). The bank sees better seasonal demand benefiting smaller-cap software names in the second half, and upgraded Kenvue (NYSE:KVUE) to Overweight and DocuSign (NASDAQ:DOCU) to Equal Weight, while downgrading Dayforce and GitLab. It continues to favor companies undergoing business model transitions, including SAP and Autodesk (NASDAQ:ADSK). Wells Fargo upgraded Zscaler (NASDAQ:ZS) to Overweight and raised its price target to $385, citing the company's potential to reach $5 billion in annual recurring revenue by fiscal 2027. The bank expects over 20% billings growth in fiscal 2026 and sees margin expansion continuing alongside revenue growth. Zscaler's shares, it said, remain undervalued relative to peers like CrowdStrike (NASDAQ:CRWD). Related articles Wells Fargo sees second-half rebound for software stocks, upgrades Zscaler AMD Advancing AI event: Here's how Wall Street analysts reacted BofA flows: Equity funds suffered weekly outflows of $10 billion Sign in to access your portfolio
Yahoo
12-06-2025
- Business
- Yahoo
Cloud Powers Oracle's Q4 Earnings: ETFs to Gain
Oracle ORCL reported solid fourth-quarter fiscal 2025 results on Wednesday after the bell, outpacing earnings and revenue estimates. It lifted its fiscal 2026 revenue growth forecast, citing robust demand for its cloud offerings from companies deploying artificial shares popped up about 8% in after-market hours on elevated volumes. The smooth trading is likely to prevail in the ETFs with the highest allocation to this software giant. These include Pacer Data and Digital Revolution ETF TRFK, iShares Expanded Tech-Software Sector ETF IGV, Janus Henderson Transformational Growth ETF JXX, First Trust NASDAQ Technology Dividend Index Fund TDIV, and FT Vest Technology Dividend Target Income ETF TDVI. The company's fourth-quarter fiscal 2025 earnings per share were $1.70, which beat the Zacks Consensus Estimate of $1.64 and improved from the year-ago earnings of $1.63. Revenues rose 11% year over year to $15.9 billion and edged past the Zacks Consensus Estimate of $15.54 billion (see: all the Technology ETFs here). The business is booming due to soaring demand for computing power that can handle artificial intelligence projects. Revenues from its cloud infrastructure unit soared 52% year over year to $3 has raised its annual revenue growth forecast for fiscal 2026. It now expects total revenues to reach at least $67 billion. This reflects an anticipated year-over-year growth of approximately 16.7%, up from its previous estimate of 15%. The upward revision underscores Oracle's confidence in sustained demand for its cloud services, which continue to be a key driver of the company's growth Safra Catz said cloud infrastructure revenues will increase more than 70% in fiscal 2026, up from 50% growth in fiscal 2025. Going forward, Oracle will likely exceed the $104 billion revenue target for fiscal 2029, Catz added. Let us delve into each ETF below:Pacer Data and Digital Revolution ETF (TRFK)Pacer Data and Digital Revolution ETF aims to offer investors exposure to globally listed stocks and depositary receipts of data and digital revolution companies. It follows the Pacer Data Transmission and Communication Revolution Index, holding 87 stocks in its basket. Oracle takes the third spot, accounting for 10.5% of the assets. Pacer Data and Digital Revolution ETF has accumulated $63.6 million in its asset base and charges 60 bps in annual fees. It trades in an average daily volume of 8,000 Expanded Tech-Software Sector ETF (IGV)iShares Expanded Tech-Software Sector ETF provides exposure to software companies in the technology and communication services sectors by tracking the S&P North American Expanded Technology Software Index. It holds a basket of 115 securities, with Oracle taking the third spot at 8.5% of the total assets (read: Salesforce to Buy Informatica in an $8 Billion AI Move: ETFs in Focus). iShares Expanded Tech-Software Sector ETF is popular, with an AUM of $11.8 billion. Its volume is good as it exchanges 4 million shares a day. IGV charges 41 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a High risk Henderson Transformational Growth ETF (JXX)Janus Henderson Transformational Growth ETF seeks to invest in companies benefiting from durable trends transforming society, including AI, deglobalization, health care innovation, digitization, and migration to the cloud. It holds 24 stocks in its basket, with Oracle taking the second spot at 8.1% of assets. Information technology, consumer discretionary, financials and healthcare are the top four sectors with double-digit exposure each. Janus Henderson Transformational Growth ETF has gathered $23.5 million in its asset base and charges 57 bps in annual fees. First Trust NASDAQ Technology Dividend Index Fund (TDIV)First Trust NASDAQ Technology Dividend Index Fund provides exposure to dividend payers in the technology sector by tracking the Nasdaq Technology Dividend Index. TDIV holds about 88 securities in its basket. Of these firms, ORCL occupies the fifth position, making up 6.8% of the Trust NASDAQ Technology Dividend Index Fund has $3.1 billion in its asset base and trades in a moderate volume of about 124,000 shares per day. The ETF charges 50 bps in annual fees (read: 5 Dividend ETFs Hovering Around a 52-Week High).FT Vest Technology Dividend Target Income ETF (TDVI)FT Vest Technology Dividend Target Income ETF is an actively managed fund that seeks to provide a target level of current income and capital appreciation by holding a portfolio of dividend-paying U.S. technology companies. The fund invests primarily in U.S. securities contained in the Nasdaq Technology Dividend Index and by utilizing an "option strategy" consisting of writing (selling) U.S. exchange-traded call options on the Nasdaq-100 Index and/or the S&P 500 Index or exchange-traded funds that track the Nasdaq-100 Index or the S&P 500 Vest Technology Dividend Target Income ETF holds 88 securities in its basket, with ORCL taking the fifth spot at 6.8% share. It has accumulated $91.1 million in its asset base and trades in a volume of 19,000 shares per day on average. TDVI charges 75 bps in annual fees. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Oracle Corporation (ORCL) : Free Stock Analysis Report First Trust NASDAQ Technology Dividend ETF (TDIV): ETF Research Reports iShares Expanded Tech-Software Sector ETF (IGV): ETF Research Reports Pacer Data and Digital Revolution ETF (TRFK): ETF Research Reports FT Vest Technology Dividend Target Income ETF (TDVI): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
