Software Stocks Just Had Their Best Week Since 2001. The Narrative Might Be Changing.

Software stocks staged a strong rebound as investors reassessed worst-case AI disruption scenarios, driving a risk-on shift across the sector. The iShares Expanded Tech-Software ETF (IGV) jumped about 15% for the week—its best weekly gain since Oct. 5, 2001—while individual software names including Oracle and Intuit rallied. The move was helped by easing geopolitical risk (Dow rose ~2.3% on news the Strait of Hormuz would reopen) and a pause in sector selling following Anthropic’s recent model updates. Market participants largely view the rally as partly short-covering and remain cautious: analysts warn new AI model launches could spur renewed volatility (Adobe fell 1.1% after an Anthropic product announcement). Overall, the price action reflects a shifting narrative around AI risk but leaves uncertainty about sustainability.