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As we enter the final quarter of 2024, the recently underperforming software industry is showing signs of a rebound, potentially offering a compelling investment opportunity. Large-cap growth stocks, particularly in the technology, communications, and consumer discretionary sectors, are making a comeback, with software companies “quietly starting to break out,” according to Roth MKM.
A technical breakout by the group could have serious legs, given how bleak sentiment seems to be toward software stocks. After lagging behind their large-cap peers in the semiconductor and platform spaces, software has now become a crowded short, and institutional investors are at their least overweight position on software since Jefferies began tracking the data.
