The great AI software wipeout is having a bit of trouble showing up. The iShares Software ETF soared 16% in August for its second-best month since 2002, leaving semiconductors nearly flat at 1%. The comeback gained steam after strong earnings from Salesforce and CrowdStrike challenged fears that AI would hollow out the sector.
- Atlassian nearly doubled in August for its best month ever, while Palantir gained 50% and Salesforce jumped 40%.
- CrowdStrike posted its best quarter on record, while Salesforce’s AI annual recurring revenue surged 240% to $1.5B.
Momentum check: History suggests September could make the software rally harder to sustain. Following the 12 strongest August rallies since 1990, software has typically lost ground in the second half of September as the broader tech trade weakened. Mizuho analyst Jordan Klein believes institutional underweighting could keep software climbing into October, with ServiceNow and Microsoft flagged as preferred plays over chasing Salesforce at current prices.
