So far, 2026 has been a bad time to be a software stock. The iShares Expanded Tech-Software Sector ETF (BATS: IGV) is a good proxy for software industry performance. As of the Feb. 9 close, the fund is already down nearly 20% in 2026.
This steep decline comes as markets fret over the emergence of new artificial intelligence (AI) software development tools. There is a belief that as software becomes easier to develop using AI, incumbent players in this space will face significant competitive pressures. Still, investors seem to be selling almost everything in software, with little regard to the true threats facing each individual firm.
