{"id":26330,"date":"2026-02-13T07:30:00","date_gmt":"2026-02-13T12:30:00","guid":{"rendered":"https:\/\/jeffclarktrader.com\/market-minute\/?p=26330"},"modified":"2026-02-12T14:16:03","modified_gmt":"2026-02-12T19:16:03","slug":"a-rip-van-winkle-moment-for-software-stocks","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/a-rip-van-winkle-moment-for-software-stocks\/","title":{"rendered":"A Rip Van Winkle Moment for Software Stocks"},"content":{"rendered":"\n

The software sector today looks a lot like the energy sector looked back in November (JMU November 4<\/a>). In other words, software stocks are setting up for a rally. <\/p>\n\n\n\n

Look at this chart comparing the software stock ETF (IGV) to the S&P 500\u2026 <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The software sector has lagged the broad stock market for the past ten months. As a result, relative to the S&P 500, software stocks are cheaper today than they have been at any time over the past five years. <\/p>\n\n\n\n

Of course, that\u2019s because Artificial Intelligence is destroying the business models \u2013 so say the market pundits. <\/p>\n\n\n\n

That\u2019s probably true to a certain extent. But, the great software companies will pivot. They\u2019ll use AI as a tool to increase their user base. And, they\u2019ll prosper. <\/p>\n\n\n\n

This is not any different than the way the oil sector looked a few months ago. Back in November, everyone was talking about solar and nuclear offering an alternative to oil. And, the oil sector (XLE) sold off to its lowest relative value to the S&P in five years. <\/p>\n\n\n\n

The best performing sector over the past few weeks is oil (XLE). <\/p>\n\n\n\n

I suspect a few weeks from now, we\u2019ll say the same thing about software stocks. <\/p>\n\n\n\n

My one hesitancy \u2013 as I mentioned to my Alliance subscribers in a call Wednesday morning \u2013 was the dramatic shift in financial TV sentiment since last week\u2026 <\/p>\n\n\n\n

Software stocks bottomed last Thursday. At the time, EVERYBODY on all the financial TV networks was bearish on the sector. By Wednesday, though, following a violent bounce off the bottom for the big software names, most of the talking heads\u2019 comments towards software were bullish. <\/p>\n\n\n\n

So, I told subscribers I would prefer to see one more decline towards last Thursday\u2019s lows \u2013 just to shake out the folks who were scrambling to be bullish. <\/p>\n\n\n\n

The recent action is serving that purpose. <\/p>\n\n\n\n

I won\u2019t argue that right now is THE bottom for the software sector. The stocks could indeed fall for a few more days, test last week\u2019s lows, and maybe even make new lows. <\/p>\n\n\n\n

But, I will argue that if you\u2019re willing to buy into the sector, and then go take a six-week nap, you\u2019ll likely be pleasantly surprised when you wake up.\u00a0<\/p>\n\n\n

Best regards and good trading,<\/p>\n

\"Signature\"<\/p>\n

Jeff Clark
Editor, Market Minute<\/em><\/p>\n\n\n

<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

AI fear have crushed software stocks \u2013 setting the stage for a potential rebound.<\/p>\n","protected":false},"author":159,"featured_media":0,"comment_status":"closed","ping_status":"0","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-26330","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/26330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/159"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=26330"}],"version-history":[{"count":2,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/26330\/revisions"}],"predecessor-version":[{"id":26339,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/26330\/revisions\/26339"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=26330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=26330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=26330"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=26330"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=26330"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=26330"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=26330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}