The software industry is no longer unified. For years, buying the iShares Expanded Tech-Software Sector ETF (IGV) provided clean, broad-based exposure to predictable software-as-a-service (SaaS) recurring revenue models. Currently, however, software stocks are a dividend bunch.
At the macro level, the industry is divided into two distinct camps: infrastructure backends enabling artificial intelligence workflows, and legacy application software facing structural pricing friction. Companies that own foundational enterprise databases, multi-cloud infrastructure, and specialized data pipelines are expanding their market share.
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Conversely, traditional per-seat SaaS providers are discovering that AI agents, which are supposed to make workforce teams vastly more efficient, can inadvertently shrink the number of paid user seats enterprise clients require.
Here’s a list of several of the biggest holdings in IGV, the most prominent ETF devoted to providing access to stocks in the software industry. It is concentrated at the top, but there’s a wide range of companies throughout.
Oracle (ORCL) stands out as a legacy giant that appears to be successfully completing a metamorphosis. Long viewed as a slow-growing database staple, Oracle has repurposed its architecture into a vital multi-cloud infrastructure company.
If I force myself to look past the short-term noise to a weekly price chart, I can at least point out that the stock is trading at a very familiar trough level, around $150. That’s a better buying spot than we’ve seen in a while.
On the other side of the spectrum, high-flying names that mounted impressive rallies are showing clear signs of exhaustion. That includes Salesforce (CRM), which rallied more than 22% on Thursday. Before you get too excited, recall that ORCL did that at one point too, only to top out shortly afterward.
