Software stocks experienced their best month in 24 years while most of the market was being written off at the start of the year...

Let's take a look...

The iShares Expanded Tech-Software ETF $IGV went through its weakest quarter since 2008 in the first quarter of this year. The market was gripped by fears of the so-called 'SaaSpocalypse'.

In May, however, a literally legendary turnaround occurred.

Best month since October 2001

The $IGV closed May up 21%, its strongest monthly performance in more than twenty years. From its April lows it has risen 35%. Despite this gain, the ETF is still 3.8% down for 2026 year-to-date. It therefore remains significantly behind the S&P 500 and the Nasdaq.

Trading volume on $IGV is exceeding the 30-day average by 5x and call options outweigh puts by four to one. The market's bet on further gains is therefore high.

Snowflake and its $6 billion deal

The spark that ignited the rally late this week was Snowflake $SNOW. On Thursday it had its best trading session in the company's history, with shares jumping 36%. The reason was very strong quarterly results, a robust outlook and a multi-year commitment of $6 billion as part of a five-year agreement with Amazon Web Services.

A substantial part of the sector also contributed to the rise

According to JPMorgan $JPM, top performers included Palo Alto Networks $PANW, Microsoft $MSFT, CrowdStrike $CRWD and especially Oracle $ORCL, which rose 35.5% over the past month.

Deutsche Bank declared the end of the SaaSpocalypse

Deutsche Bank officially declared the SaaSpocalypse dead. In its note it said that after consulting experts and even AI models like Gemini, ChatGPT and Claude, it did not find a single software company that expected a negative impact from AI on its 2026 revenues. According to the bank, hedge funds are also showing growing interest in SaaS investments.

Did you buy on the dips? I mainly bought $MSFT, which was very interesting at prices around $370.