Software Stocks Rally Amid Market Turmoil
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 05 2026
0mins
Source: CNBC
- Software Stock Recovery: The iShares Expanded Tech-Software Sector ETF (IGV) surged nearly 8% this week, indicating signs of recovery in the software sector despite broader market turmoil due to U.S.-Iran war fears.
- Microsoft's Strong Performance: Microsoft shares rose nearly 5% this week, making it the best performer among the Magnificent Seven, as investors viewed the recent market selloff as a buying opportunity, reflecting renewed confidence in large-cap tech stocks.
- Improved Market Sentiment: Although software stocks fell in January and February due to AI concerns, analysts believe the selloff may have been overly pessimistic, with the software sector's fundamentals remaining solid and a potential re-rating on the horizon.
- Investor Confidence Rebuilding: Deutsche Bank strategists noted that the information technology sector's valuations have returned to levels seen during the 2022 selloff, indicating a recovery in market risk appetite for software stocks, although growth potential may be limited.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy MSFT?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 441.310
Low
500.00
Averages
631.36
High
678.00
Current: 441.310
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company. The Company develops and supports software, services, devices, and solutions. The Company’s segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services. This segment primarily comprises: Office Commercial, Office Consumer, LinkedIn, and Dynamics business solutions. The Intelligent Cloud segment consists of server products and cloud services, including Azure and other cloud services, SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (CALs), and Nuance and GitHub; and Enterprise Services, including enterprise support services, industry solutions and Nuance professional services. The More Personal Computing segment primarily comprises Windows, Devices, Gaming, and search and news advertising.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Microsoft's AI Spending Plans Under Investor Scrutiny
- Investor Scrutiny: Microsoft's ambitious AI spending plans have drawn significant investor scrutiny, although its enterprise ecosystem may be strengthening, indicating a cautious market outlook on its future growth.
- Diversified Monetization: The company is leveraging multiple avenues to monetize AI through Azure, Copilot, Microsoft 365, GitHub, and security products, suggesting an expanding profit potential in both infrastructure and software sectors.
- Market Price Analysis: Stock prices as of May 23, 2026, raise questions about whether Microsoft is a buy at current levels, reflecting divergent views among investors regarding its future performance.
- Strategic Implications: Microsoft's AI investments not only represent a commitment to technological innovation but may also yield substantial revenue growth in the future, further solidifying its leadership position in the tech industry.
See More
Nvidia Unveils RTX Spark Superchip for PC Market Expansion
- Product Launch: Nvidia unveiled the RTX Spark superchip at the Computex trade show in Taipei, which combines a 20-core Arm processor with a Blackwell graphics chip and supports up to 128GB of unified memory, marking a direct entry into the PC market that poses a threat to Intel, AMD, and Qualcomm.
- Market Reaction: The announcement of RTX Spark led to declines in shares of Intel, AMD, and Qualcomm, while Nvidia's stock rose, indicating market attention and potential impact, although Nvidia's financial stakes in the PC market remain relatively small.
- Competitive Landscape Shift: The RTX Spark aims to transform user experience by running AI agents directly on devices, challenging a market long dominated by Intel and AMD, despite Nvidia's previous unsuccessful attempts in the PC sector over a decade ago.
- Industry Impact Assessment: Intel's PC chip business accounted for over half of its first-quarter revenue, and facing Nvidia's challenge may intensify market pressures, while AMD and Qualcomm must reassess their strategies to counter Nvidia's strong entry.
See More
Nvidia Launches RTX Spark Superchip to Compete in PC Market
- New Superchip Launch: Nvidia unveiled the RTX Spark superchip at the Computex trade show in Taipei, integrating a 20-core Arm processor with a Blackwell graphics chip, marking its direct competition with Intel, AMD, and Qualcomm in the PC market.
- Market Reaction: The announcement of RTX Spark led to declines in the stock prices of Intel, AMD, and Qualcomm, while Nvidia's shares rose, indicating strong market interest and perceived threat from Nvidia's entry into the PC sector.
- Financial Impact: Despite Nvidia's total revenue of $81.6 billion in Q1 2027, with $75.2 billion from data center products, the potential revenue from the PC market remains relatively small, suggesting limited immediate impact on its overall financial health.
- Changing Competitive Landscape: Nvidia's entry could reshape the competitive dynamics of the PC chip market, particularly posing the greatest threat to Intel, whose client computing group accounts for 56% of its total revenue, while Nvidia's strong brand and AI capabilities may attract consumer attention.
See More
CrowdStrike Reports Strong Earnings but Stock Drops Post-Results
- Earnings Beat: CrowdStrike's fiscal Q1 2027 revenue surged 26% year-over-year to $1.39 billion, exceeding the $1.36 billion consensus estimate, indicating strong performance in the cybersecurity sector, although the stock fell over 11% due to profit-taking by short-term investors.
- Adjusted EPS Growth: The adjusted earnings per share (EPS) for the quarter reached $1.10, a 51% increase over the $1.07 estimate, showcasing significant profitability improvements, despite the market's tepid response, highlighting investor sensitivity to short-term fluctuations.
- Stock Split Announcement: CrowdStrike announced a 4-for-1 stock split, with trading on a split-adjusted basis expected to begin on July 2, aimed at enhancing stock accessibility for investors, even though stock splits do not inherently create additional value for shareholders.
- Optimistic Future Guidance: The company raised its total revenue outlook for fiscal 2027 to between $5.91 billion and $5.96 billion, surpassing the $5.89 billion expectation, reflecting management's confidence in future growth, while also adjusting EPS forecasts upward, indicating ongoing business growth potential.
See More
Middle East Tensions Impact Market Volatility
- Escalating Middle East Tensions: Israeli Prime Minister Netanyahu stated that Israel and the U.S. are prepared to take military action against Iran if necessary, which pushed oil prices higher despite a ceasefire agreement with Lebanon, highlighting the complexity of the situation.
- U.S. Congressional Response: The U.S. House passed a war powers measure to end military involvement in Iran, reflecting growing congressional pushback against the scope and duration of the conflict, although the measure still needs Senate approval and could face a presidential veto.
- Corporate Earnings Impact: Broadcom's shares plummeted nearly 14% in after-hours trading due to weaker-than-expected software revenue and failure to raise its full-year AI chip sales target, negatively impacting Wall Street's recent tech-led rally.
- Bitcoin Market Dynamics: Long-term holders of Bitcoin have begun selling, with approximately $2.4 billion sold in the past two days, which could significantly affect Bitcoin's supply/demand balance, particularly as 26% of the sold Bitcoin was purchased above $90,000.
See More
Amazon Backs Seattle's AI Data Center Regulations Amid Layoffs
- Capital Expenditure vs. Layoffs: Amazon plans to spend $200 billion in 2025 primarily on data centers and AI infrastructure, while simultaneously laying off 30,000 employees over the past eight months, highlighting a conflict between expansion and cost control.
- Regulatory Measures: The Seattle City Council approved a one-year moratorium on large AI data center construction to allow time for regulation, reflecting local government concerns over the rapid growth of AI data centers.
- Industry Response: Amazon engineers urged the council to require data center developers to commit to renewable energy and to stop using non-disclosure agreements when announcing new projects, indicating employee concerns about the company's environmental policies and social responsibilities.
- Industry Trends: Despite layoffs, Amazon and other tech giants like Microsoft and Alphabet are committing approximately $700 billion in 2025 for AI infrastructure, demonstrating the industry's ongoing pursuit of AI technology.
See More
Microsoft's AI Spending Plans Under Investor Scrutiny
- Investor Scrutiny: Microsoft's ambitious AI spending plans have drawn significant investor scrutiny, although its enterprise ecosystem may be strengthening, indicating a cautious market outlook on its future growth.
- Diversified Monetization: The company is leveraging multiple avenues to monetize AI through Azure, Copilot, Microsoft 365, GitHub, and security products, suggesting an expanding profit potential in both infrastructure and software sectors.
- Market Price Analysis: Stock prices as of May 23, 2026, raise questions about whether Microsoft is a buy at current levels, reflecting divergent views among investors regarding its future performance.
- Strategic Implications: Microsoft's AI investments not only represent a commitment to technological innovation but may also yield substantial revenue growth in the future, further solidifying its leadership position in the tech industry.
See More
Nvidia Unveils RTX Spark Superchip for PC Market Expansion
- Product Launch: Nvidia unveiled the RTX Spark superchip at the Computex trade show in Taipei, which combines a 20-core Arm processor with a Blackwell graphics chip and supports up to 128GB of unified memory, marking a direct entry into the PC market that poses a threat to Intel, AMD, and Qualcomm.
- Market Reaction: The announcement of RTX Spark led to declines in shares of Intel, AMD, and Qualcomm, while Nvidia's stock rose, indicating market attention and potential impact, although Nvidia's financial stakes in the PC market remain relatively small.
- Competitive Landscape Shift: The RTX Spark aims to transform user experience by running AI agents directly on devices, challenging a market long dominated by Intel and AMD, despite Nvidia's previous unsuccessful attempts in the PC sector over a decade ago.
- Industry Impact Assessment: Intel's PC chip business accounted for over half of its first-quarter revenue, and facing Nvidia's challenge may intensify market pressures, while AMD and Qualcomm must reassess their strategies to counter Nvidia's strong entry.
See More
Nvidia Launches RTX Spark Superchip to Compete in PC Market
- New Superchip Launch: Nvidia unveiled the RTX Spark superchip at the Computex trade show in Taipei, integrating a 20-core Arm processor with a Blackwell graphics chip, marking its direct competition with Intel, AMD, and Qualcomm in the PC market.
- Market Reaction: The announcement of RTX Spark led to declines in the stock prices of Intel, AMD, and Qualcomm, while Nvidia's shares rose, indicating strong market interest and perceived threat from Nvidia's entry into the PC sector.
- Financial Impact: Despite Nvidia's total revenue of $81.6 billion in Q1 2027, with $75.2 billion from data center products, the potential revenue from the PC market remains relatively small, suggesting limited immediate impact on its overall financial health.
- Changing Competitive Landscape: Nvidia's entry could reshape the competitive dynamics of the PC chip market, particularly posing the greatest threat to Intel, whose client computing group accounts for 56% of its total revenue, while Nvidia's strong brand and AI capabilities may attract consumer attention.
See More
CrowdStrike Reports Strong Earnings but Stock Drops Post-Results
- Earnings Beat: CrowdStrike's fiscal Q1 2027 revenue surged 26% year-over-year to $1.39 billion, exceeding the $1.36 billion consensus estimate, indicating strong performance in the cybersecurity sector, although the stock fell over 11% due to profit-taking by short-term investors.
- Adjusted EPS Growth: The adjusted earnings per share (EPS) for the quarter reached $1.10, a 51% increase over the $1.07 estimate, showcasing significant profitability improvements, despite the market's tepid response, highlighting investor sensitivity to short-term fluctuations.
- Stock Split Announcement: CrowdStrike announced a 4-for-1 stock split, with trading on a split-adjusted basis expected to begin on July 2, aimed at enhancing stock accessibility for investors, even though stock splits do not inherently create additional value for shareholders.
- Optimistic Future Guidance: The company raised its total revenue outlook for fiscal 2027 to between $5.91 billion and $5.96 billion, surpassing the $5.89 billion expectation, reflecting management's confidence in future growth, while also adjusting EPS forecasts upward, indicating ongoing business growth potential.
See More
Middle East Tensions Impact Market Volatility
- Escalating Middle East Tensions: Israeli Prime Minister Netanyahu stated that Israel and the U.S. are prepared to take military action against Iran if necessary, which pushed oil prices higher despite a ceasefire agreement with Lebanon, highlighting the complexity of the situation.
- U.S. Congressional Response: The U.S. House passed a war powers measure to end military involvement in Iran, reflecting growing congressional pushback against the scope and duration of the conflict, although the measure still needs Senate approval and could face a presidential veto.
- Corporate Earnings Impact: Broadcom's shares plummeted nearly 14% in after-hours trading due to weaker-than-expected software revenue and failure to raise its full-year AI chip sales target, negatively impacting Wall Street's recent tech-led rally.
- Bitcoin Market Dynamics: Long-term holders of Bitcoin have begun selling, with approximately $2.4 billion sold in the past two days, which could significantly affect Bitcoin's supply/demand balance, particularly as 26% of the sold Bitcoin was purchased above $90,000.
See More
Amazon Backs Seattle's AI Data Center Regulations Amid Layoffs
- Capital Expenditure vs. Layoffs: Amazon plans to spend $200 billion in 2025 primarily on data centers and AI infrastructure, while simultaneously laying off 30,000 employees over the past eight months, highlighting a conflict between expansion and cost control.
- Regulatory Measures: The Seattle City Council approved a one-year moratorium on large AI data center construction to allow time for regulation, reflecting local government concerns over the rapid growth of AI data centers.
- Industry Response: Amazon engineers urged the council to require data center developers to commit to renewable energy and to stop using non-disclosure agreements when announcing new projects, indicating employee concerns about the company's environmental policies and social responsibilities.
- Industry Trends: Despite layoffs, Amazon and other tech giants like Microsoft and Alphabet are committing approximately $700 billion in 2025 for AI infrastructure, demonstrating the industry's ongoing pursuit of AI technology.
See More
