30% Selloff in Software ETF Since October Highlights Buying Case for Adobe, Microsoft
Software stocks have sunk 30% since last October as the iShares Expanded Tech-Software ETF sells off on generative AI disruption fears. Enterprise names like Microsoft, Atlassian and Adobe trade near record lows despite high switching costs, robust moats and growing AI integration boosting fundamentals.
1. ETF Plunge and Market Reaction
The iShares Expanded Tech-Software ETF has fallen 30% since October as investors fear generative AI could upend established enterprise software revenue streams, triggering a broad sector sell-off.
2. Enterprise Software Moats
High switching costs, long-term contracts and integrated IT ecosystems create durable competitive moats for enterprise software providers, reducing the likelihood of rapid customer churn despite emerging AI solutions.
3. Top Software Stocks at Low Valuations
Microsoft, Atlassian and Adobe now trade near historical low multiples, offering potential entry points as each company reports solid revenue growth, expanding AI features and strong free cash flow generation.