Nvidia’s (NVDA) fourth-quarter earnings report, released Wednesday after market close, leaves the software sector at a critical crossroads. While Nvidia, the largest company on the planet by market capitalization, has once again demonstrated its dominance in AI infrastructure, the iShares Expanded Tech-Software Sector ETF (IGV) continues to struggle.
The narrative for IGV has shifted from high-growth enthusiasm to high-risk, high-return. Akin to a gamble on whether AI will ultimately enhance or cannibalize traditional software models. Analysts have even considered the potential for some software names to go to zero. This is indeed a dark and strange time for the industry. And since it is a subsection of the vaulted technology sector, IGV’s fate is tied to the broader market more than most industry ETFs.
