Oracle, Microsoft power battered software stocks toward best 3-day stretch in almost a year
Software shares are rising again early Wednesday, putting the widely watched iShares Expanded Tech Software ETF on track for its best three-day stretch in almost a year.
So far this week, Oracle is up more than 20%, Microsoft is up over 9%, and both ServiceNow and Datadog have gained more than 12%.
Intuit, CrowdStrike, Autodesk, and Atlassian were also among the software shares rising Wednesday after taking lumps on worries about AI disruption earlier this year.
Why the rebound? Mean reversion is a powerful force in markets, and some of these shares could simply be enjoying an overdue snapback.
Bloomberg suggests there’s some “bottom fishing” going on, with investors finally deciding that the price for these still highly profitable, cash flow-positive companies has fallen low enough to make them a compelling bargain.
Pat Tschosik, chief thematic strategist at research firm Ned Davis, told Sherwood News that the market may have been too panicky about software stocks as a whole, slamming the shares of software companies that could survive and thrive in the AI era along with those doomed to disruption.
Determining the difference between the winners and the losers will take a look at the fundamentals of individual companies.
“Somebody who does the homework is going to make a lot of money in these stocks,” he said.
So far this week, Oracle is up more than 20%, Microsoft is up over 9%, and both ServiceNow and Datadog have gained more than 12%.
Intuit, CrowdStrike, Autodesk, and Atlassian were also among the software shares rising Wednesday after taking lumps on worries about AI disruption earlier this year.
Why the rebound? Mean reversion is a powerful force in markets, and some of these shares could simply be enjoying an overdue snapback.
Bloomberg suggests there’s some “bottom fishing” going on, with investors finally deciding that the price for these still highly profitable, cash flow-positive companies has fallen low enough to make them a compelling bargain.
Pat Tschosik, chief thematic strategist at research firm Ned Davis, told Sherwood News that the market may have been too panicky about software stocks as a whole, slamming the shares of software companies that could survive and thrive in the AI era along with those doomed to disruption.
Determining the difference between the winners and the losers will take a look at the fundamentals of individual companies.
“Somebody who does the homework is going to make a lot of money in these stocks,” he said.
