Unloved software stocks have their day in the sun

Call it a dead-cat bounce — or for the more optimistically inclined, beaten-down growth stocks finally offering some value:

The iShares Expanded Tech Software ETF is catching a bid on Monday morning, up nearly 3% as of 10 a.m. ET, while the VanEck Semiconductor ETF is trading roughly flat.

As a compromise, you could say that software’s trading like nobody owns it and investors have decided to maybe not short it so much.

The likes of Workday, ServiceNow, AppLovin, CrowdStrike, Atlassian, Palantir, and Circle are posting massive gains to kick off the week.

In the five sessions ended Friday, the semis ETF outperformed its software counterpart by a whopping 18.4 percentage points, the most on record.

For what it’s worth, the chart also shows that semis vs. software has had some very significant, tradable reversals despite how poorly the latter has performed this year. In fact, software’s best-ever five-session stretch relative to semis came in early March, when traders were digesting the US-Israeli attacks against Iran.

These two major parts of the tech sector have never traded more out of step with one another than they have been lately.