Software opened the year as the market's favorite casualty. The SPDR S&P Software & Services ETF (NYSEARCA: XSW) and the iShares Expanded Tech-Software Sector ETF (BATS: IGV) each dropped roughly 25% to 27% in the first quarter alone, as traders priced in a future where artificial intelligence (AI) made subscription software obsolete.
Software earnings never got that memo. Subscriber counts held or grew, revenue kept arriving, and the companies sitting on enterprise customer data started building AI into their own products—not losing to it.
